Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a small firm intends to increase the capacity of a

A small firm intends to increase the capacity of a bottleneck operation by adding a new machine....

50.1K

Verified Solution

Question

Accounting

A small firm intendsto increase the capacity of a bottleneck operation by adding a newmachine. Two alternatives, A and B, have been identified, and theassociated costs and revenues have been estimated. Annual fixedcosts would be $36,000 for A and $31,000 for B; variable costs perunit would be $8 for A and $11 for B; and revenue per unit would be$16.

    

a.Determine eachalternative’s break-even point in units. (Round your answerto the nearest whole amount.)

    

  QBEP,Aunits
  QBEP,Bunits

   

b.At what volumeof output would the two alternatives yield the same profit?(Round your answer to the nearest wholeamount.)

    

  Profitunits

   

c.If expectedannual demand is 11,000 units, which alternative would yield thehigher profit?

    

  Higher profit(Click toselect)BA

Answer & Explanation Solved by verified expert
4.3 Ratings (784 Votes)
a The break even quantity for Machine A Qbep FC Contribution Per unit 36000168 4500 units The break even quantity for Machine B Qbep FC Contribution Per unit 310001611 6200    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

You wish to experimentally demonstrate how the GABA B receptors are associated with the membrane. Describe...

Biology
Q

Draw free body diagrams for the motorcycle rider for each of the following situations. Label all...

Physics
Q

Describe and explain 10 future sustainability plans of park hyatt hotel Maldives

Operations Management
Q

Solve the inequality. Graph the solution set.- 5+x?1

Basic Math
Q

The top 14 speeds, in miles per hour, for Pro-Stock drag racing over the past...

Basic Math
Q

Let f x C cx 2x x CX cx if x 5 if x 5...

Calculus
Q

Direct costs is considered more accurate than indirect costs, do you agree? Explain and discuss...

Accounting
Q

George Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for...

Accounting
Q

On June 1, 2019, YODA CORP. acquired a 5-year, 10%, P1,000,000 face value bonds at...

Finance
Q

I also need part (d) if possible, which is "Using Variable-Cost Pricing, compute the markup...

Accounting
Q

The Following are extracts from the financial statements of Wewe Ltd. As at 31st March:...

Accounting
Q

Comparative financial statements for Weaver Company follow: Required: Using the indirect method, determine the...

Accounting