. Location A would result in annual fixed costs of $300,000 and variable costs of $55 per unit. Annual fixed costs at Location B are $600,000 with variable costs of $32 per unit. Sales volume is estimated to be 30,000 units per year. At what volume are the two facilities equal in cost?
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Ответ:
13,043.48 units
Explanation:
Cost Equation calculate the total cost of the products produced / sold in a period. It adds the variable cost of the given numbers of units and Fixed cost for the period to calculate the total cost.
The Total Cost Can be Calculated using following Equation.
y = mx + b
y = Total cost
m = variable cost
b = fixed cost
x = quantity of unit produced / sold
Placing Values in the cost equation at each location.
Location A
y = $55x + $300,000
Location B
y = $32x + $600,000
According to given condition
Cost of Location A = Cost of Location B
$55x + $300,000 = $32x + $600,000
$55x - $32x = $600,000 - $300,000
$23x = $300,000
x= $300,000 / $23 = 13,043.48 units
Check
y = $55 x 13,043.48 + $300,000 = $717,391.4 + $300,000 = $1,017,391.4
Location B
y = $32x 13,043.48 + $600,000 = $417,391.4 + $600,000 = $1,017,391.4
Ответ:
ok but can you do me a favor please and btw why do we want to report it?
Explanation: