Weiss manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. two vendors have presented proposals. the fixed costs are $ 55,000 for proposal a and $ 70,000 for proposal b. in addition to the proposed fixed costs from the two vendors, weiss's management anticipates that they will have to spend $ 10,000 for installations to be completed. the variable cost is $ 13.00 for a and $ 10.00 for b. the revenue generated by each unit is $ 20.00

the break-even point in dollars for the proposal by vendor a=

(round your response to the nearest whole number).

b) the break-even point in dollars for the proposal by vendor b =

(round your response to the nearest whole number).

expert answer

Proposal A:  $185,714.29

Proposal B: $160,000

Explanation:

Giving the following information:

$10,000 for installations to be completed.

The revenue generated by each unit is $ 20.00

Proposal A:

Fixed costs= 55,000

The variable cost is $13.00

Proposal B:

Fixed costs= 70,000

The variable cost is $10.00

Break-even point (dollars)= fixed costs/ contribution margin ratio

Proposal A: (55,000+10,000)/[(20-13)/20]= $185,714.29

Proposal B: (70,000 + 10,000)/[(20-10)/20]= $160,000

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23

answer; im thinking the correct answer is (7years);