ABC company intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed cost for proposal A are $10,000, and for proposal...
ABC company intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed cost for proposal A are $10,000, and for proposal B, $8,000. The variable cost for A is $10.00, and for B, $7.00. The revenue generated by each unit is $20.00. You definitely will pick up a machine which will produce the larger profit. If 2000 units will be sold, what will the profit in dollars be generated assuming you have bought a right machine? The units calculated will be round up to integer.
Select one:
A. $20,000
B. $25,000
C. $30,000
D. $40,000
E. None of them
Homework Answers
Answer - E ( None of them)
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