Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: 'Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs of $14,000 per standard unit produced. McKinney would have annual fixed costs of $960,000 and variable costs of $13,000 per standard unit. The finished items sell for $30,000 each. a) The volume of output at which both the locations have the same profit= standard units (round your response to the nearest whole number).

Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: 'Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs of $14,000 per standard unit produced. McKinney would have annual fixed costs of $960,000 and variable costs of $13,000 per standard unit. The finished items sell for $30,000 each. a) The volume of output at which both the locations have the same profit= standard units (round your response to the nearest whole number).

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

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Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
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Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have
been identified: Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs
of $14,000 per standard unit produced. McKinney would have annual fixed costs of $960,000 and variable costs of
$13,000 per standard unit. The finished items sell for $30,000 each.
$13,000 per stan
a) The volume of output at which both the locations have the same profit
response to the nearest whole number).
=
standard units (round your

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Step 1: Define the Profit Formula for Each Location

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Step 2: Plug in the Known Values

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Step 3: Create the Equations for Each Location

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Step 4: Set the Two Profit Equations Equal to Each Other

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Step 5: Solve for the Number of Units

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Step 6: Calculation

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