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# Joe’s Machine Shop has identified the grinding station as its key bottleneck and has identified two options for expansion. The Grinder 1000 has fixed costs of \$20,000 and \$10 per unit. The Grinder 2000 has fixed costs of \$40,000 and \$8 per unit variable costs. Revenue per unit is projected to be \$16. a. Determine the break-even point for each alternative. b. At what volume of output would the two alternatives yield the same profit? c. If demand is 13,000 units, which option yields a higher profit? How much?

```Joe’s Machine Shop has identified the grinding station as its key bottleneck and has identified two options for expansion. The Grinder 1000 has fixed costs of \$20,000 and \$10 per unit. The Grinder 2000 has fixed costs of \$40,000 and \$8 per unit variable costs. Revenue per unit is projected to be \$16.
a. Determine the break-even point for each alternative.
b. At what volume of output would the two alternatives yield the same profit?
c. If demand is 13,000 units, which option yields a higher profit? How much?```

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