A manufacturing firm is considering three alternatives for automation. They anticipate annual production volume to be 75,000 units. The costs for each alternative are as shown:
$\begin{array}{lccc}
&&\underline{\text { Alternative }}\
& \underline{1}& \underline{2 }& \underline{ 3}\
\text { Annual Fixed Costs } & 60,000 & \$ 180,000 & \$ 300,000 \
\text { Variahle Cost/Unit } & \$ 065 & \$ 055 & \$ 040
\end{array}$
a. What sales price must be charged for Alternative 1 to breakeven?
b. What sales price must be charged for Alternative 2 to breakeven?
c. What sales price must be charged for Alternative 3 to breakeven?

Question

A manufacturing firm is considering three alternatives for automation. They anticipate annual production volume to be 75,000 units. The costs for each alternative are as shown:
 $\begin{array}{lccc}
 &&\underline{\text { Alternative }}\
& \underline{1}& \underline{2 }& \underline{ 3}\
\text { Annual Fixed Costs } & 60,000 & \$ 180,000 & \$ 300,000 \
\text { Variahle Cost/Unit } & \$ 065 & \$ 055 & \$ 040
\end{array}$ 
a. What sales price must be charged for Alternative 1 to breakeven?
b. What sales price must be charged for Alternative 2 to breakeven?
c. What sales price must be charged for Alternative 3 to breakeven?

Quizplus · Accepted Answer

The Answer of A manufacturing firm is considering three alternatives for automation. They anticipate annual production volume to be 75,000 units. The costs for each alternative are as shown:
 $\begin{array}{lccc}
 &&\underline{\text { Alternative }}\
& \underline{1}& \underline{2 }& \underline{ 3}\
\text { Annual Fixed Costs } & 60,000 & \$ 180,000 & \$ 300,000 \
\text { Variahle Cost/Unit } & \$ 065 & \$ 055 & \$ 040
\end{array}$ 
a. What sales price must be charged for Alternative 1 to breakeven?
b. What sales price must be charged for Alternative 2 to breakeven?
c. What sales price must be charged for Alternative 3 to breakeven?

A Manufacturing Firm Is Considering Three Alternatives for Automation A What Sales Price Must Be Charged for Alternative 1