Bismarck Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for Proposal A is $65,000, and for proposal B, $34,000. The variable cost for A is $10, for and for B, $14. The revenue generated by each unit is $18.
a. What is the break-even point for each point proposal?
b. If the expected volume is $8,300 units, which alternative should be chosen?