Question: Morgan Inc, is considering two new machines. Machine A will generate revenues of $130,000, have variable costs of $35,000, and fixed costs of $12,000. Machine
Morgan Inc, is considering two new machines. Machine A will generate revenues of $130,000, have variable costs of $35,000, and fixed costs of $12,000. Machine B will generate revenues of $145,000, have variable costs of $70,000, and fixed costs of $12,000. Which machine should be selected and why? Machine A because the variable costs are $35,000 lower. Machine A because the incremental profit is $20.000 higher. Either machine because the fixed expenses are the same. Machine B because incremental revenue is $15,000 higher
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