Clever Company is considering the feasibility of the two methods, dry process or wet process, in producing its product. Data taken from the accounting department were assembled And presented as follows:

Dry ProcessWet process

Direct materials3.00 per lb3.00 per lb

Direct labor2.00 per min2.00 per min

Variable overhead 2.00 per min2.00 per min

Unit variable expenses1.20 per unit1.2 per unit

Fixed overhead per month 500,000800,000

No. of lbs per unit4 lbs6 lbs

No. of labor minutes per unit 20 minutes15 minutes

Fixed expenses (per month)100,000142,000

Required:

1. the total variable costs and expenses per process

2. the level of production and sales where the profit or loss under each method would be the same