Question: Please help with parts c. and d.: Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The
Please help with parts c. and d.:
Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $65,000, and for proposal B, $34,000. The variable cost for A is $10, and for B, $14. The revenue generated by each unit is $18.
- What is the crossover point in units for the two options? 7750 Units
- At an expected volume of 8,300 units, which alterative should be chosen? If the expected volume is 8300 units, proposal A yields a profit of $1400 and proposal B yields a loss of $800.Hence,proposal A should be chosen.
- What is the range of units for which proposal A is preferable?
- What is the range of units for which proposal B is preferable?
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