A small business company is considering updating the current production line. There are two plans. For plan A, the fixed cost will be $35,000 and the variable cost will be $25 per unit after the update. For plan B, the fixed costs will be $45,000 and the variable cost will be $23 per unit after the update.
Please answer the following questions:
(a) Suppose the selling price is $35, what is the break-even volume for each plan? Which plan has a lower break-even volume?
(b) Suppose the selling price is $35. Also, the company aims to achieve a profit of $5,000 after the update. What selling amount will be required to achieve the profit for each plan? Which plan has a lower volume?