The Hi-Fi manufacturing company is currently evaluating two possible processes for the manufacture of a toy, and makes available to you the following information.

	Process A (Sh.)	Process B (Sh.)
Variable cost per unit Sales price per unit Total fixed costs per year Anticipated sales (next 2 years in units) Capacity in units	12 20 3,000,000 400,000 430,000	14 20 2,100,000 400,000 500,000

You are required to suggest:

Which process should be chosen? Substantiate your answer.

Would you change your answer as given above if you were informed that the capacities of the two processes are as follows; A 600,000 units and B 500,000 units. Why? Substantiate your answer