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The following table demonstrates the critical factors in company's decision on choosing the new piece of equipment. Compute the breakeven volume and utilization for each option and then find out the range of volumes for which each option is best decision.


Machine A

Machine B

Fixed Costs/Month

$ 20,000.00

$ 10,000.00

Variable Cost/Unit

$ 3.90

$ 4.25

Revenue/Unit

$ 21.00

$ 19.00

Capacity/Month

2500

1000

Breakeven Volume



Breakeven Utilization



Best Option Volume Range:



min



max



Project Management, Management Studies

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