SHOW FORMULAS IN EXCEL SOLVE THE FOLLOWING USING EXCEL4. A small firm intends to increase the capacity of a bottleneck operationby adding a new machine. Two alternatives, A and B. have beenidentified, and the associated costs and revenues have been estimated.Annual fixed costs would be $40,000 for A and $30,000 for B: variablecosts per unit would be $10 for A and $11 for B; and revenue per unitwould be $15.a. Determine each alternative's break-even point in units.b. At what volume of output would the two alternatives yield the sameprofit?c. If expected annual demand is 12,000 units, which alternative wouldyield the higher profit?

Breakeven units are the units that need to be sold in order to break even. Breakeven units are…

Answered: a. Determine each alternative's…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter5: Network Models

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A small firm intends to increase the capacity of a bottleneck operation by adding a new machine.Two alternatives, A and B, have been identified, and the associated costs and revenues have beenestimated. Annual fixed costs would be $40,000 for A and $30,000 for B; variable costs per unitwould be $10 for A and $11 for B; and revenue per unit would be $15.b. At what volume of output would the two alternatives yield the same profit?
a. what is the relationship between design capacity, system capacity, and actual output. b. how is a projected output within the boundaries of the design capacity and system capacity?
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a. Determine each alternative's break-even point in units. b. At what volume of output would the two alternatives yield the same profit? c. If expected annual demand is 12,000 units, which alternative would yield the higher profit?