e Excel to show formulas used Amazing is evaluating three locations for a second headquarters. Costs for construction at location A are $18,900,000, Location B are $21,700,000 and Location C are $23,300,000. Variable costs for Location A are $16, Location B are $14 and Location C are $12. The company plans to sell products for $27. Create a cost-volume graph that shows cost lines for all three options through 2,000,000 unit
e Excel to show formulas used Amazing is evaluating three locations for a second headquarters. Costs for construction at location A are $18,900,000, Location B are $21,700,000 and Location C are $23,300,000. Variable costs for Location A are $16, Location B are $14 and Location C are $12. The company plans to sell products for $27. Create a cost-volume graph that shows cost lines for all three options through 2,000,000 unit
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
- Use Excel to show formulas used
- Amazing is evaluating three locations for a second headquarters. Costs for construction at location A are $18,900,000, Location B are $21,700,000 and Location C are $23,300,000. Variable costs for Location A are $16, Location B are $14 and Location C are $12. The company plans to sell products for $27.
- Create a cost-volume graph that shows cost lines for all three options through 2,000,000 units.
Expert Solution
Step 1
Break even point = Fixed costs / (sales price per unit – variable cost per unit)
· Location A
Break even point = 18900000/(27-16)
= 1,718,181.818 units = ~ 1,718,182 units
· Location B
Break even point =21700000/(27-14)
= 1,669,230.769 units = ~ 1,669,231 units
· Location C
Break even point =23300000/(27-12)
= 1,553,333.33 units = ~ 1,553,334 units
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