Goliath manufacturing plc must implement a manufacturing process that reduces the amount of toxic by-products. Two processes have been identified that provide the same amount of toxic product reduction. The first process would incur £205,000 in fixed costs and £650 per unit of vairable costs. The second process has fixed costs of £145,000 and variable costs of £800 per unit.
a) What is the break-even quantity beyond which the first process is more attractive?
b) What is the difference in total costs if the quantity produced is 500 units?
c) Display the above results on suitable graphs/charts.