What volume of output would the two locations

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Reference no: EM132303814

A small producer of machine tools wants to move to a larger building, and has identified two alternatives. Location A has annual fixed costs of $120,000 and variable costs of $15,000 per unit; location B has annual fixed costs of $320,000 and variable costs of $10,000 per unit. The finished items sell for $20,000 each.

a. At what volume of output would the two locations have the same total cost?

Volume of output ______ units

b-1. For what range of output would location A be superior? (Enter your answer as a whole number. Do not include the indifference point in your answer.)

Range of output 0 to ______

b-2. For what range would B be superior? (Enter your answer as a whole number. Do not include the indifference point in your answer.)

Range of output ______ or more

Reference no: EM132303814

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