A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: $$\begin{array} { l c c }
\text { Location } & \text { FC (annual) } & \text { VC (per unit) } \
\hline \text { Atlanta } & \$ 80,000 & \$ 20 \
\text { Phoenix } & \$ 140,000 & \$ 16
\end{array}$$
What would be the total annual costs at the point of indifference?
A) $300,000
B) $240,000
C) $380,000
D) $220,000
E) $760,000

Question

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: $$\begin{array} { l c c } 
\text { Location } & \text { FC (annual) } & \text { VC (per unit) } \
\hline \text { Atlanta } & \$ 80,000 & \$ 20 \
\text { Phoenix } & \$ 140,000 & \$ 16
\end{array}$$
What would be the total annual costs at the point of indifference?
A) $300,000
B) $240,000
C) $380,000
D) $220,000
E) $760,000

Quizplus · Accepted Answer

The Answer of A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: $$\begin{array} { l c c } 
\text { Location } & \text { FC (annual) } & \text { VC (per unit) } \
\hline \text { Atlanta } & \$ 80,000 & \$ 20 \
\text { Phoenix } & \$ 140,000 & \$ 16
\end{array}$$
What would be the total annual costs at the point of indifference?
A) $300,000
B) $240,000
C) $380,000
D) $220,000
E) $760,000

A Manufacturing Firm Is Considering Two Locations for a Plant