Question: value are change and answer needs to be in detail Sundon 1) Two production processes A, B have the following cost structure as shown in

value are change and answer needs to be in detail

Sundon 1) Two production processes "A, B" have the following cost structure as shown in the diagram below: (15 min) 20 marks Process = Fixed Cost per Year $109,000 $76,000 Variable Cost per Unit $4.00 $5.50 List of formulas: Profit = Revenue - Total cost Revenue = Selling price* volume Total cost = Fixed cost + cost per item * volume Break even volume = (Fixed cost)/(Unit contribution margin) B a. What is the most economical process for a volume of 6,800 units? (8 marks) b. How many units per year must be sold with process B to have annual profits of $75,000 if the selling price is $12.5 per unit? (6 marks) C. Calculate the break-even volume for process A assuming $12.5 selling price. (6 marks)

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