Question: One company is considering developing the current manufacturing method and you have the following data on both alternatives: Items Current method Proposed method Fixed cost

One company is considering developing the current manufacturing method and you have the following data on both alternatives:

Items

Current method

Proposed method

Fixed cost

BD 15000

BD 21000

Variable cost per unit

BD 4

BD 2

Sales price per unit

BD 10

BD 10

1. At what point in sales volume, the two alternatives will be the same?

2. Which alternative is better if you know that the production and sales capacity of the current and the proposed method is 5,000 units?

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