Asmall firm intends to increase the capacity of a bottleneck operation by adding a new machine. two alternatives, a and b, have been identified, and the associated costs and revenues have been estimated. annual fixed costs would be $39,000 for a and $21,000 for b; variable costs per unit would be $10 for a and $11 for b; and revenue per unit would be $15. determine each alternative's break-even point in units. (round your answer to the nearest whole amount.)

Alternative A : 7,800 units

Alternative B: 5,250 units

Explanation:

Were:

for A:

15 - 10 = 5 contrbution margin

each unit contributes 5 dollars

then: $39,000 fixed cost / $5 per unit =  7,800 units

It need to sale 7,800 untis to pay the fixed cost generated for alternative A

for B:

15 - 11 = 4 contribution margin

each unit contributes 4 dollars

then: $21,000 fixed cost / $4 per unit = 5,250

It need to sale 5,250 units to pay the fixed cost for this alternative

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