A Company Is Considering Two Alternative Technologies for Manufacturing a Product

question 6

Essay

A company is considering two alternative technologies for manufacturing a product. The cost data are shown below. $\begin{array}{|l|c|c|}\hline & \text { A } & \text { B } \\\hline \text { Fixed Cost } & \$ 10,000 & \$ 25,000 \\\hline \text { Variable Cost } & \$ 35 / \text { unit } & \$ 15 / \text { unit } \\\hline\end{array}$ What is the breakeven volume, and under what circumstances should A be chosen?

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Definitions:

Benzophenone

An organic compound used primarily as a photoinitiator in polymer chemistry and as a flavor or fragrance additive, characterized by its ketone attached to two benzene rings.

Electrophile

A chemical species that is attracted to electrons and tends to accept electrons during a chemical reaction.

Acetophenone

An organic compound, characterized as the simplest aromatic ketone, used as a precursor to fragrances and resins.

o,p-positions

Refers to the ortho and para positions in a benzene ring, which are locations relative to a reference point on the ring.