A firm is considering three capacity alternatives: A, B, and C. Alternative A would have an annual fixed cost of $101000 and variable costs of $26 per unit. Alternative B would have annual fixed costs of $126000 and variable costs of $28 per unit. Alternative C would have fixed costs of $88000 and variable costs of $30 per unit. Revenue is expected to be $51 per unit.
Compute all three Breakeven Points. What is the value of the lowest break-even quantity?
Compute the Profit for 15000 units for all three alternatives. What is the highest profit that could be made for an annual output of 15000 units?
For each alternative, compute the volume required to generate a profit of $90000. What is the lowest volume of output required to generate an annual profit of $90000?