Problem 5-4 (Algo)

A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $44,000 for A and $20,000 for B; variable costs per unit would be $10 for A and $11 for B; and revenue per unit would be $19. a. Determine each alternatives break-even point in units. (Round your answer to the nearest whole amount.)

QBEP,A	_______units
QBEP,B	_______units

b. At what volume of output would the two alternatives yield the same profit (or loss)? (Round your answer to the nearest whole amount.)

Q

_______

units