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A manufacturing firm is considering two options to use in the production of their new product. Alternative I is to buy a machine which is
A manufacturing firm is considering two options to use in the production of their new product. Alternative I is to buy a machine which is a bit costly, i.e., fixed cost (FC) is high, but the variable cost (VC - \$/unit) is smaller and constant for all ranges of production. Alternative I/ is to buy from an external supplier - the variable cost is high and also constant for all ranges of production, but there is no fixed cost. For each alternative, the annual fixed cost and the variable cost for different production ranges is given in the table below. The selling price is expected to be $50 for both options. Calculate the breakeven point for Alternative I: \begin{tabular}{|l} \hline 1000 \\ \hline 1500 \\ 2000 \\ \hline 4500 \\ \hline \end{tabular} Question 13 (3 points) Refer to the information in Q12. Calculate the breakeven point for Alternative II: 0 1000 2000 4500
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