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Q 1 Oliva Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A

Q1 Oliva Manufacturing intends to increase capacity through the addition of new
equipment. Two vendors have presented proposals. The fixed cost for proposal A is
$65,000 and for proposal B, $34,000. The variable cost for A is $10 and for B,$14. The
revenue generated by each unit is $18.
(1) What is the break-even point for eacis proposal?
(2) If the expected volume is 8,300 units, which alternative should be chosen?Q1 Oliva Manufacturing intends to increase capacity through the addition of new
equipment. Two vendors have presented proposals. The fixed cost for proposal A is
$65,000 and for proposal B, $34,000. The variable cost for A is $10 and for B,$14. The
revenue generated by each unit is $18.
(1) What is the break-even point for eacis proposal?
(2) If the expected volume is 8,300 units, which alternative should be chosen?
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