Worthington Machining must decide whether to purchase Process A with specialized metal folding equipment needing two employees to operate it or Process B with general purpose folding equipment requiring five employees. Process A requires a fixed cost of $1,430,000 and a variable cost of $14.32 per metal panel. Process B requires a fixed cost of $820,000 and a variable cost of $20.05. Process A is more automated than Process B.

1. What is the break-even quantity between these two processes?

2. If predicted demand for next year is 120,000 panel folds, what process do you recommend? What is the cost savings?