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You need to increase the capacity of your manufacturing operation by adding new equipment. Two vendors have presented proposals., summarized as follows:

Proposal A: FC = $50K, VC = $12/unit
Proposal B: FC = $70K, VC = $10/unit
Sales Revenue = $20.00 /unit sold

Draw the graph to represent the costs and revenue stream.
a. find out the BEP for Proposal A?
b. find out the BEP for Proposal B?
c. Over what range of volumes is each proposal the lesser cost?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M989631

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