UK Number USA Number USA VIP Number Support Email

A company is evaluating two production processes for a new product: Process A: Fixed Costs = $50,000; Variable Cost per Unit = $10 ? Proce

by

I’m currently working on an assignment for my Operations Management course and need assistance with process selection based on cost analysis.

Scenario:

A company is evaluating two production processes for a new product:

  • Process A: Fixed Costs = $50,000; Variable Cost per Unit = $10
     
  • Process B: Fixed Costs = $25,000; Variable Cost per Unit = $18
     

Tasks:

  1. Determine the break-even point where both processes have equal total costs.
     
  2. Identify which process is more cost-effective at production volumes of 3,000 and 7,000 units.
     
  3. Provide a brief explanation of how the break-even analysis informs the decision-making process in operations management.