An operations manager is deciding onthe level of automation for a newprocess. The fixed cost forautomation includes the equipmentpurchase price, installation, andinitial spare parts. The variable costsper unit for each level of automationare primarily labor related. Each unitcan be sold for $76. As in manycases, you have the defaultalternative of doing nothing ($0 fixedcost, $0 variable costs).What is the break-even point foroption A?DO NOT INCLUDE A COMMA. Roundyour answer to the nearest wholenumber and do not include units ora comma. For example, submit12450 and NOT 12,450.Alternative FixedCostsABC$100,000$292,000$560,000VariableCosts perUnit$54$37$20Round your answer to the nearest wholenumber and do not include units.

Breakeven point = fixed cost / (selling price - variable cost)

Answered: What is the break-even point for option…

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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What is the break-even point for option A?