The following table shows the critical factors in a company's decision on choosing a new piece of equipment. Calculate the breakeven volume and utilization for each option and then find the range of volumes for which each option is the 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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|
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min
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|
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max
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