An operations manager has narrowed down the search for a new plant for McIntosh Enterprises to three locations.Fixed and variable costs follow: Plot the total cost curves in the chart provided and identify the range over which each location would be best.Then use break-even analysis to calculate exactly the break-even quantity that defines each range. Which of the following statements is correct?
A)Location C is the best one if volumes are quite low.
B)Location A becomes the most expensive place to produce at volumes less than 10,000.
C)The break-even quantity between A and B is less than or equal to 17,000 units.
D)The break-even quantity between C and B is more than 30,000 units.

Question

An operations manager has narrowed down the search for a new plant for McIntosh Enterprises to three locations.Fixed and variable costs follow:  Plot the total cost curves in the chart provided and identify the range over which each location would be best.Then use break-even analysis to calculate exactly the break-even quantity that defines each range.  Which of the following statements is correct?
A)Location C is the best one if volumes are quite low. 
B)Location A becomes the most expensive place to produce at volumes less than 10,000. 
C)The break-even quantity between A and B is less than or equal to 17,000 units. 
D)The break-even quantity between C and B is more than 30,000 units.

Quizplus · Accepted Answer

The Answer of An operations manager has narrowed down the search for a new plant for McIntosh Enterprises to three locations.Fixed and variable costs follow:  Plot the total cost curves in the chart provided and identify the range over which each location would be best.Then use break-even analysis to calculate exactly the break-even quantity that defines each range.  Which of the following statements is correct?
A)Location C is the best one if volumes are quite low. 
B)Location A becomes the most expensive place to produce at volumes less than 10,000. 
C)The break-even quantity between A and B is less than or equal to 17,000 units. 
D)The break-even quantity between C and B is more than 30,000 units.

An Operations Manager Has Narrowed Down the Search for a New