Use breakeven analysis in order to select the best process. Assume revenue is the same for either process A or B. Answer questions a) and b).
Process A: Fixed cost = $70,000 per month Variable cost = $8 per unit
Process B: Fixed cost = $40,000 per month Variable cost = $20 per unit
a) What is the breakeven point?
b) If you anticipate selling 4000 units per month, which process do you select and why?