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Cortez Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are
Cortez Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are $55,000 for proposal A and $80,000 for proposal B. In addition to the proposed fixed costs from the two vendors, management at Cortez anticipates that they will have to spend $12,000 for installations to be completed. The variable cost is $13.00 for A and $11.00 for B. The revenue generated by each unit is $22.00. a) The break-even point in dollars for the proposal by Vendor A = $ (round your response to the nearest whole number). b) The break-even point in dollars for the proposal by Vendor B = $ (round your response to the nearest whole number).
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