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Three production processes - A,B,and C - have the following cost structure: Process Fixed Cost per Year Variable Cost per Unit A \ 120,000 \ 3.00 B 90,000 4.00 C 80,000 4.50
a. What is the most economical process for a volume of 8,000 units?
b. How many units per year must be sold with each process to have annual profits of $50,000 if the selling price is $6.95 per unit?
c. What is the break-even volume for each process?
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