of 3 pts 4 11 of 17(13 compledel Score: 52%, 15.6 of 30 p- Problem 8.19 Qvestion

Question

of 3 pts 4 11 of 17(13 compledel Score: 52%, 15.6 of 30 p- Problem 8.19 Qvestion Help Pegay Lane Corp, a producer of machine tools, wants to move to a larger sie. Two atemative locatsions have been ldentfed. Bonham and McKinney standard unit produced. McKinney would have annual fixed costs of $960 Bonham would have fxed costs of $820,000 per year and varable costs of $15,000 per ,000 and variable osts of $14,000 per standand unit. The firished ems sell for $29,000each a) The volume of output at which both the locations have the same proft sandard units (round your response t ocations have the same proftsandard units (round your response to the nearest Enter your arswer in the answer box and then click Check Answer Clear All

Explanation / Answer

Data following data is provided in the question

FC for Bonham= $820,000

VC= $15000

Fc for McKinney =$960,000

VC= $14000

Selling price for each= $29000

Assume that x is the no at which both locations will have equal profit

820000+15000x = 960000+14000x

15000x-14000x= 960000-820000

X= 140units

Let us check the validity of the answer

820000+15000*140= 960000+14000*1402

2920000= 2920000

So answer is 140 units

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.