Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have $5,000, and for proposal B, $33,000. The variable cost for A is $9, and for B, $14. The revenue generated by e a) What is the crossover point for the two options? The crossover point for the two options is |units. (Round your response to the nearest whole number.) b) At an expected volume of 6,200 units, which alternative should be chosen? The profit (loss) if proposal A is accepted and 6,200 units are produced is s (Round your response to the ne The profit (loss) if proposal B is accepted and 6,200 units are produced is $| (Round your response to the ne should be chosen at an expected volume of 6,200 units.

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Author:Pride, William M
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Chapter19: Pricing Concepts
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Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is
$55,000, and for proposal B, $33,000. The variable cost for A is $9, and for B, $14. The revenue generated by each unit is $18.
a) What is the crossover point for the two options?
The crossover point for the two options is
units. (Round your response to the nearest whole number.)
b) At an expected volume of 6,200 units, which alternative should be chosen?
The profit (loss) if proposal A is accepted and 6,200 units are produced is $
(Round your response to the nearest dollar and include a minus sign if necessary.)
The profit (loss) if proposal B is accepted and 6,200 units are produced is $ (Round your response to the nearest dollar and include a minus sign if necessary.)
should be chosen at an expected volume of 6,200 units.
Transcribed Image Text:Stapleton Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $55,000, and for proposal B, $33,000. The variable cost for A is $9, and for B, $14. The revenue generated by each unit is $18. a) What is the crossover point for the two options? The crossover point for the two options is units. (Round your response to the nearest whole number.) b) At an expected volume of 6,200 units, which alternative should be chosen? The profit (loss) if proposal A is accepted and 6,200 units are produced is $ (Round your response to the nearest dollar and include a minus sign if necessary.) The profit (loss) if proposal B is accepted and 6,200 units are produced is $ (Round your response to the nearest dollar and include a minus sign if necessary.) should be chosen at an expected volume of 6,200 units.
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