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Answer: 2 Ocean: Total Cost - Fixed Cost = Variable Cost ( $ 8 2 3 , 0 0 0 - $ 6 0 0

Answer:2
Ocean: Total Cost - Fixed Cost = Variable Cost ($823,000-$600,000=$223,000)
Variable Cost ?? Units =$223,0002.5 million lbs.=$0.0892lb.
Equation: 600,000+.0892x(x= demand in pounds)
Air: , Total Cost - Fixed Cost = Variable Cost ($800,000-$450,000=$350,000)
Variable Cost ?? Units =$350,0002.5 million lbs.=$0.14lb.
Equation: 450,000+.14x(x= demand in pounds)
600,000+.0892x=450,000+.14x(solve for x)
x=2,952,756 lbs., Ocean/Air cost the same when demand is 2,952,756 lbs.
Answer:3
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