Perfect Furniture is a manufacturer of kitchen tables and chairs. Th e company is currently deciding between two new methods for making kitchen tables. Th e fi rst process is estimated to have a fi...

Perfect Furniture is a manufacturer of kitchen tables and
chairs. Th e company is currently deciding between two new
methods for making kitchen tables. Th e fi rst process is estimated
to have a fi xed cost of $80,000 and a variable cost of $75 per unit.
Th e second process is estimated to have a fi xed cost of $100,000
and a variable cost of $60 per unit.
(a) Graphically plot the total costs for both methods.
Identify which ranges of product volume are best for
each method.
(b) If the company produces 500 tables a year, which method
provides a lower total cost?