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Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: Bonham and McKinney. Bonham
Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: Bonham and McKinney. Bonham would have fixed costs of $ per year and variable costs of $ per standard unit produced. McKinney would have annual fixed costs of $ and variable costs of $ per standard unit. The finished items sell for $ each.
a Evaluate the volume of output at which the two locations would have the same profit?
b Evaluate the range of output at which Bonham would be superior have higher profits
c Evaluate the range for McKinney to be selected as superior location?
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