Alternative Annual Fixed Cost Annual Variable Cost per Unit

A $50,000 $20

B $100,000 $10

Vegas Herman In. is investigating implementing some new production machinery as a part of its operations. Two alternatives have been found, and they have the following fixed & variable costs. What is the break-even point (which means break-even output)?

a. 5,000.

b. 6,000.

c. 7,000.

d. 8,000.