A company is considering expansion. Fixed costs amount to `4,20,000 and are expected to increase by 1,25,000 when plant expansion is completed. The present plant capacity is 80,000 units a year....

A company is considering expansion. Fixed costs amount to `4,20,000 and are expected to increase by 1,25,000 when plant expansion is completed. The present plant capacity is 80,000 units a year. Capacity will increase by 50 per cent with expansion. Variable costs are currently `6.80 per unit and are expected to go down by `0.40 per unit with the expansion. The current selling price is `16 per unit and is expected to remain the same under each alternative. What are the break-even points under each alternative? Which alternative is better, and why?