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Q 1 ( BREAK - EVEN ANALYSIS ) - An operations manager is deciding on the level of automation used to produce a new product.

Q1(BREAK-EVEN ANALYSIS)- An operations manager is deciding on the level of automation used to produce a new product. The fixed cost for automation includes the equipment purchase price, installation, and initial spare parts. The variable costs per unit for each level of automation are primarily labor related. Each unit can be sold for $100. If you determine that this new product will not be profitable, you can choose to not produce or sell it ($0 fixed cost, $0 variable costs). We have no forecasts/predictions about future demand. Instead, we want to know what our best automation alternative is at every possible level of demand. Assume the sale price is $100 per unit.
\table[[Alternative,\table[[Fixed],[Costs]],\table[[Variable],[Costsper],[Unit]]],[A,110000,60],[B,400000,45],[C,600000,25],[D,800000,18]]
part A
Calculate the break-even quantities for each alternative. If the projected demand is 2,000 units, what should you do?
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