a) What is the crossover point in units for the two options? b) At an expected volume of 8,300 units, which alternative should be chosen

Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Stapleton Manufacturing intends to increase
capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is
$65,000, and for proposal B, $34,000. The variable cost for A is
$10, and for B, $14. The revenue generated by each unit is $18.
a) What is the crossover point in units for the two options?
b) At an expected volume of 8,300 units, which alternative
should be chosen?

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