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Class on optimization and accounting Exercise for Chapter 1: Tom Johnson Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have
Class on optimization and accounting
Exercise for Chapter 1: Tom Johnson Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $50,000, and for proposal B, $70,000. The variable cost for A is $12, and for B, $10. The revenue generated by each unit is $20. a) What is the Break-Even point (BEP) in units for proposal A? b) What is the BEP in units for proposal B? c) If the expected volume is 8,500 units, which proposal should be chosen?|| d) If the expected volume is 15,000 units, which proposal should be chosenStep by Step Solution
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