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Explain how to do this problem 23. DuLarge Fabricators wants to increase capacity by adding a new machine. They are considering proposals from two vendors,
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23. DuLarge Fabricators wants to increase capacity by adding a new machine. They are considering proposals from two vendors, A and B. The fixed costs associated with Machine A are $90,000 and for Machine B, $75,000. The variable cost for Machine A is $15 per unit of product and for B,$18. The revenue is $22 per unit of product. It is estimated that 5,000 units will be sold. Which machine (if any) should be purchased? A) Machine A B) Machine B C) Either Machine A or Machine B X/OQ QTP =181590,00078,000=5,000 enits D) Neither Machine A nor Machine B BE QTY FOR A=221590,000=12,857 units. NEITHERStep by Step Solution
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