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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

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

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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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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