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CoursHeroTranscribedText: A small company intends to increase the capacity of its bottleneck operation by adding a new machine. Two alternatives, A and B, have been
CoursHeroTranscribedText: A small company intends to increase the capacity of its bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $42,000 forA and $30,000 for B; variable costs per unit would be $13 for A and $15 for B; and revenue per unit would be $19 for A and $20 for B. a. Determine each alternative's breakeven point. Quantitative break even point of A units per year Quantitative break even point of B units per year b. At what quantity would the two alternatives yield the same profit? Quantity |:| units per year c. If expected annual demand is 11,000 units, which alternative would yield higher profit? OB DA
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