ABC Corporation would like to evaluate three production processes (A,B,and C)to accommodate the changes in demand for its products.The fixed and variable cost per unit are tabled here.Determine the process to be selected when the production volume is 3,000 units. $$\begin{array} { | l | l | l | }
\hline \text { Process } & \begin{array} { l }
\text { Fxed } \
\text { Cost }
\end{array} & \begin{array} { l }
\text { Variable Cost per } \
\text { Unit }
\end{array} \
\hline \mathrm { A } & \$ 30,000 & \$ 40 \
\hline \mathrm { B } & \$ 40,000 & \$ 30 \
\hline \mathrm { C } & \$ 80,000 & \$ 20 \
\hline
\end{array}$$

Question

ABC Corporation would like to evaluate three production processes (A,B,and C)to accommodate the changes in demand for its products.The fixed and variable cost per unit are tabled here.Determine the process to be selected when the production volume is 3,000 units. $$\begin{array} { | l | l | l | } 
\hline \text { Process } & \begin{array} { l } 
\text { Fxed } \
\text { Cost }
\end{array} & \begin{array} { l } 
\text { Variable Cost per } \
\text { Unit }
\end{array} \
\hline \mathrm { A } & \$ 30,000 & \$ 40 \
\hline \mathrm { B } & \$ 40,000 & \$ 30 \
\hline \mathrm { C } & \$ 80,000 & \$ 20 \
\hline
\end{array}$$

Quizplus · Accepted Answer

To find the best process to select, we need to calculate the total cost for each process and choose the one with the lowest total cost. 
For process A, the total cost for producing 3,000 units would be: 
Total cost = Fixed cost + Variable cost per unit x Number of units produced 
Total cost = $30,000 + $40 x 3,000 
Total cost = $150,000

For process B, the total cost for producing 3,000 units would be: 
Total cost = Fixed cost + Variable cost per unit x Number of units produced 
Total cost = $40,000 + $30 x 3,000 
Total cost = $130,000

For process C, the total cost for producing 3,000 units would be: 
Total cost = Fixed cost + Variable cost per unit x Number of units produced 
Total cost = $80,000 + $20 x 3,000 
Total cost = $140,000

Therefore, process B has the lowest total cost at $130,000, making it the best choice for producing 3,000 units.

ABC Corporation Would Like to Evaluate Three Production Processes (A,B,and