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Problem 8-3 A small producer of machine tools wants to move to a larger building, and has identified two alternatives. Location A has annual fixed
Problem 8-3 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 $200,000 and variable costs of $12,000 per unit, location B has annual fixed costs of $400,000 and variable costs of $10,000 per unit. The finished items sell for $15,000 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 O to b-2. For what range would be superior? (Enter your answer as a whole number. Do not include the indifference point in your answer.) Range of output or more Problem 8-3 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 $200,000 and variable costs of $12,000 per unit, location B has annual fixed costs of $400,000 and variable costs of $10,000 per unit. The finished items sell for $15,000 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 o to b-2. For what range would be superior? (Enter your answer as a whole number. Do not include the indifference point in your answer.) Range of output or more
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