Question
Three production processes-A, B, and C-have the following cost structure: Fixed Cost Variable Cost Process per Year per Unit $120,000 $3.00 90,000 4.00 80,000
Three production processes-A, B, and C-have the following cost structure: Fixed Cost Variable Cost Process per Year per Unit $120,000 $3.00 90,000 4.00 80,000 4.50 a. What is the most economical process for a volume of 8,000 units? b. How many units per year must be sold with each process to have annual profits of $50,000 if the selling price is $6.95 per unit? c. What is the break-even volume for each process?
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