A Fabrication Company Wants to Increase Capacity by Adding a New

question 89

Multiple Choice

A fabrication company 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, $75,000. The variable cost for A is $15.00 per unit and for B, $18.00. The revenue generated by the units processed on these machines is $21 per unit. If the estimated output is 5000 units, which machine should be purchased?

• A) machine A
• B) machine B
• C) either machine A or machine B
• D) no purchase because neither machine yields a profit at that volume
• E) purchase both machines since they are both profitable

---

Definitions:

Voltage-Gated Channel

A type of ion channel that opens or closes in response to changes in membrane potential, critical for nerve impulse transmission.

Chemical Synapse

A junction between two nerve cells, where neurotransmitters are used to relay signals.

Presynaptic Terminal

The end part of a nerve fiber that releases neurotransmitters to transmit nerve signals to another neuron across a synapse.

Postsynaptic Membrane

The part of the nerve cell membrane that is on the receiving end of a synapse, responding to neurotransmitters released by the presynaptic neuron.