Two different manufacturing processes are being considered for making a new product. The first process is...

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Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only $51,400 per year and variable costs of $650 per unit. The second process has fixed costs of $401,000 but variable costs of only $235 per unit. a. What is the break-even quantity, beyond which the second process becomes more attractive than the first? The volume at which the second process becomes more attractive is b. If the expected annual sales for the product is 905 units, which process would you choose? units. (Enter your response rounded to the nearest whole number.) O A. Since the production volume at which the second manufacturing process becomes more attractive is higher than the expected annual sales for the product, you should choose the first manufacturing process. B. Since the production volume at which the second manufacturing process becomes more attractive is lower than the expected annual sales for the product, you should choose the first manufacturing process. O C. Since the production volume at which the second manufacturing process becomes more attractive is higher than the expected annual sales for the product, you should choose the second manufacturing process. O D. Since the production volume at which the second manufacturing process becomes more attractive is lower than the expected annual sales for the product, you should choose the second manufacturing process. Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only $51,400 per year and variable costs of $650 per unit. The second process has fixed costs of $401,000 but variable costs of only $235 per unit. a. What is the break-even quantity, beyond which the second process becomes more attractive than the first? The volume at which the second process becomes more attractive is b. If the expected annual sales for the product is 905 units, which process would you choose? units. (Enter your response rounded to the nearest whole number.) O A. Since the production volume at which the second manufacturing process becomes more attractive is higher than the expected annual sales for the product, you should choose the first manufacturing process. B. Since the production volume at which the second manufacturing process becomes more attractive is lower than the expected annual sales for the product, you should choose the first manufacturing process. O C. Since the production volume at which the second manufacturing process becomes more attractive is higher than the expected annual sales for the product, you should choose the second manufacturing process. O D. Since the production volume at which the second manufacturing process becomes more attractive is lower than the expected annual sales for the product, you should choose the second manufacturing process.

Answer rating: 100% (QA)

a To determine the breakeven quantity for each process we can use the breakeven point formula Breake... View the full answer