Company XYZ has production line with a max. capacity (Actual O/P) of 230,000 ton. During 2017 and 2018, the capacity of the factory barely covered the market demand. Thus, it seems critical to rethink their capacity for 2019. During the meeting, the operations manager proposed two capacity alternatives to increase their capacity. The first alternative is to buy a new production line. The second alternative is to toll manufacture with a third party. The following table indicates the fixed and variable cost of each alternative: Buy a new line Toll manufacture $ 100000 None $ 150/ton Fixed cost Variable cost $ 900/ton 1. You are required to assess the two proposals, regarding the toll manufacture/buy alternative. 2. If the volume changed, at what volume would the manager be indifferent between buying and toll manuf.? Later, company XYZ is considering three capacity alternatives as follows: A C FC 100,000 80,000 VC/ unit $22 $30 Revenue is expected to be $50 per unit. 1. Which alternative has the lowest total cost? B 120,000 $ 20 2. Which alternative has the lowest break-even quantity? 3. Which alternative will produce the highest profits for an annual output of 10,000 units? 4. Which alternative would require the lowest volume of output to generate an annual profit of $50,000?