Determine for what level of demand each production process should be chosen. 1 answer below »

Nano Tech is ready to begin production of its exciting new technology. The company is evaluating three methods of production: (A) a small production facility with older equipment, (B) a larger production facility that is more automated, and (C) subcontracting to an electronics manufacturer in Singapore. The costs of each alternative are shown below. Determine for what level of demand each production process should be chosen.

Process

Fixed Cost

Variable Cost

A

$200,000

$40

B

$600,000

$20

C

$0

$60