Problem 3 A manufacturing company must implement a new manufacturing process to produce a new vacuum cleaner Two processes have been identified that produce the same vacuum cleaner The cost data from the two processes is as follows Process Fixed Cost per year Variable Cost per unit I $350,000 $50 II $150,000 $90 The revenue that will be generated from the sales of each vacuum cleaner produced by is $130 per unit A Determine each process break even point B For what volume range is each process superior C If the expected annual demand for the product is 12,000 units, which process is best

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Question: Problem 3 A manufacturing company must implement a new manufacturing process to produce a new vacuum cleaner. Two processes have been identified that produce the

Problem 3

A manufacturing company must implement a new manufacturing process to produce a new vacuum cleaner. Two processes have been identified that produce the same vacuum cleaner. The cost data from the two processes is as follows:

Process	Fixed Cost per year	Variable Cost per unit
I	$350,000	$50
II	$150,000	$90

The revenue that will be generated from the sales of each vacuum cleaner produced by is $130 per unit.

A. Determine each process break-even point.

B. For what volume range is each process superior?

C. If the expected annual demand for the product is 12,000 units, which process is best?

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