What is the break-even quantity


Solve the below problem:

Q: Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only $47,800 per year and variable costs of $ 715 per unit. The second process has fixed costs of $409,000 but variable costs of only $ 205 per unit.

a. What is the break-even quantity, beyond which the second process becomes more attractive than the? first?

b. If the the expected annual sales for the product of 800 units, which process you choose?

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Operation Management: What is the break-even quantity
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