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Joe's Machine Shop has identified the grinding station as its key bottleneck and has identified 2 options for expansiton. Grinder 1000 has fixed cost of $20000 and $10 per unit variable cost. Grinder 2000 has a fixed cost of $40000 and $8 per unit variable cost. Revenue per unit is projected at $16. a. Determine the break-even point for each. b. At what volume of output would the two alternatives yield the same profit? c. If demand is 13000 unites, which options yeilds a higher profit and how much?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M9700221

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