Cost volume profit.

The company has decided to introduce a new product. The new product can be manufactured on equipment A and equipment B. Application of the method does not affect the quality of the product. The estimated cost of production is as follows:

	Equipment A				B equipment
Raw materials			5 /unit				5,4 /unit
Direct work	1 hour/unit	6 /hour	6 /unit	2 hour/unit		4 /hour	8 /unit
Variable general costs	1 hour/unit	3 /hour	3 /unit	2 hour/unit		2,8 /unit	5,6 /unit
Fixed production costs			1020000				300000

The marketing department recommends an implementation price of 25 /unit. Annual amount of marketing expenses 200000 + 1 for each unit sold, regardless of the production method.

Necessary:

Calculate critical points for both methods;

Determine the annual production volume at which it would be no matter which production method to use.

Draw a graph of profit volume (on ordinates profit, on abscissa unit) on which both methods would be depicted.