Fred's Fabrication, Inc

question 15

Multiple Choice

Fred's Fabrication, Inc. wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The fixed costs for machine A are $90,000 and for machine B, $70,000. The variable cost for A is $9.00 per unit and for B, $14.00. The revenue generated by the units processed on these machines is $20 per unit. The crossover between machine A and machine B is

• A) 4,000 units, with A more profitable at low volumes.
• B) 4,000 dollars, with A more profitable at low volumes.
• C) 4,000 units, with B more profitable at low volumes.
• D) 4,000 dollars, with B more profitable at low volumes.
• E) cannot be calculated from the information provided.

---

Definitions:

Boomerang Children

Young adults who return to live in their family home with their parents after a period of independence, often due to financial difficulties or personal choice.

Substance Addictions

A dependency on substances, such as drugs or alcohol, characterized by an uncontrollable urge to consume the substance despite harmful consequences.

Nostalgia

A sentimental longing or wistful affection for the past, often for a period or place with happy personal associations.

Gay Parents

A term referring to parents who identify as gay or homosexual, highlighting the diversity in family structures.