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( A ) Breakeven Analysis F C A + ( V C A * * Q ) = F C B + ( V C
A Breakeven Analysis
A buyer has the option of buying a component from two suppliers. The fixed cost and variable cost of supplier A are $ and $ per unit, respectively. The fixed cost and variable cost of supplier B are $ and $ per unit, respectively. The total requirement of the component is units.
a What is the breakeven quantity?
b What is the total cost at breakeven quantity?
c What is the total cost of supplier at the quantity needed?
d What is the total cost of supplier B at the quantity needed?
e If the total demand is units, which supplier should the company buy from? Why?
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