question archive The Soft Toys Company has collected information on fixed and variable costs for four potential plant locations
The Soft Toys Company has collected information on fixed and variable costs for four potential plant locations
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The Soft Toys Company has collected information on fixed and variable costs for four potential plant locations. Location Annual Fixed Cost ($) Unit Variable Cost ($) A 200,000 50 B 300,000 45 C 400,000 25 D 600,000 20 a. The break-even point between location A and C is . b. The break-even point between location C and D is .
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Answer:
a. Let the break even point be X, then:
200000 + 50*X = 400000 + 25*X
25*X = 200000
X = 8000 Units
b. Let the break even point be X, then:
400000 + 25*X = 600000 + 20*X
5*X = 200000
X = 40000
