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Cavalier printing is adding a new printing process.  They have priced three alternative machines: A, B, and...

Cavalier printing is adding a new printing process.  They have priced three alternative machines: A, B, and C. Machine A would have an annual fixed cost of $120,000 and variable costs of $25 per unit. Machine B would have annual fixed costs of $140,000 and variable costs of $20 per unit. Machine C would have fixed costs of $90,000 and variable costs of $30 per unit. Revenue is expected to be $50 per unit.

  1. Which alternative has the lowest break-even quantity?
  2. Which alternative will produce the highest profits for an annual output of 10,000 units?
  3. Which alternative would require the lowest volume of output to generate an annual profit of $50,000?

Round your answer to the nearest whole number.

math   Statistics-And-Probability   
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Answer #1

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a) The best alternative is machine C

b) The best alternative is machine B

c) The best alternative is machine B

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