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.
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Machine A
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Machine B
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Fixed Costs/Month
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$ 20,000.00
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$ 10,000.00
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Variable Cost/Unit
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$ 3.90
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$ 4.25
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Revenue/Unit
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$ 21.00
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$ 19.00
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Capacity/Month
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2500
|
1000
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Breakeven Volume
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|
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Breakeven Utilization
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|
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Best Option Volume Range:
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min
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|
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max
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