A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $36,000 for A and $35,000 for B; variable costs per unit would be $7 for A and $11 for B; and revenue per unit would be $20.
-Determine each alternative’s break-even point in units. (Round your answer to the nearest whole amount.)
-At what volume of output would the two alternatives yield the same profit? (Round your answer to the nearest whole amount.)