Markland manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. two vendors have presented proposals. the fixed costs are $ 50 comma 000 for proposal a and $ 70 comma 000 for proposal b. the variable cost is $ 12.00 for a and $ 10.00 for b. the revenue generated by each unit is $ 20.00. vendor a and vendor b have the same cost when the output volume = nothing units (round your response to the nearest whole number).

Question is Incomplete

a) What is the break-even point in units for proposal A?

b) What is the break-even point in units for proposal B?

a. Break Even Point for Proposal A = 6,250 Units

a. Break Even Point for Proposal B = 7,000 Units

Explanation:

a. Calculating Break Even Point for Proposal A

Given

For Proposal A:

Fixed costs = $50,000

Variable cost = $ 12.00

Revenue generated = $20.00.

The break unit point is calculated using the following formula:

Break Even Point = F/ (R - V) =

Where F = Fixed Cost = $50,000

R = Generated Revenue = $20

V = Variable Cost = $12

By Substituton

Break Even Point = $50000/($20-$12)

Break Even Point = $50000/$8

Break Even Point = 6250 Units

a. Calculating Break Even Point for Proposal A

Given

For Proposal A:

Fixed costs = $50,000

Variable cost = $ 12.00

Revenue generated = $20.00.

The break unit point is calculated using the following formula:

Break Even Point = F/ (R - V) =

Where F = Fixed Cost = $50,000

R = Generated Revenue = $20

V = Variable Cost = $12

By Substituton

Break Even Point = $50,000/($20-$12)

Break Even Point = $50,000/$8

Break Even Point = 6250 Units

b. Calculating Break Even Point for Proposal B

Given

For Proposal B

Fixed costs = $70,000

Variable cost = $ 10.00

Revenue generated = $20.00.

The break unit point is calculated using the following formula:

Break Even Point = F/ (R - V) =

Where F = Fixed Cost = $70,000

R = Generated Revenue = $10

V = Variable Cost = $12

By Substituton

Break Even Point = $70,000/($20-$10)

Break Even Point = $70,000/$10

Break Even Point = 7,000 Units

statement of owner's equity;

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