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A Company Is Considering Two Alternative Technologies for Manufacturing a Product

Question 66

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A company is considering two alternative technologies for manufacturing a product. The cost data are shown below.  A  B  Fixed Cost $10,000$25,000 Variable Cost $35/ unit $15/ unit \begin{array}{|l|c|c|}\hline & \text { A } & \text { B } \\\hline \text { Fixed Cost } & \$ 10,000 & \$ 25,000 \\\hline \text { Variable Cost } & \$ 35 / \text { unit } & \$ 15 / \text { unit } \\\hline\end{array} What is the breakeven volume, and under what circumstances should A be chosen?

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Let X = number of units produced
For A: ...

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