Markland manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. two vendors have presented proposals. the fixed costs are $ 50,000 for proposal a and $ 70,000 for proposal b. the variable cost is $ 12.00 for a and $ 10.00 for b. the revenue generated by each unit is $ 20.00. vendor a and vendor b have the same cost when the output volume = units (round your response to the nearest whole number).

The indifference point is 10,000 units.

Explanation:

Giving the following information:

Two vendors have presented proposals. The fixed costs are $ 50,000 for proposal A and $ 70,000 for proposal B. The variable cost is $ 12.00 for A and $ 10.00 for B. The revenue generated by each unit is $ 20.00.

Proposal A= 50,000 + 12*x

Proposal B= 70,000 + 10*x

70,000 + 10x= 50,000 + 12x

20000= 2x

10000= x

The indifference point is 10,000 units.

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