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 $940,000 and variable costs of $12,800 per standard unit. The finished items sell for $28,000 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). b) Básed on the analysis of the volume, after rounding the numbers to the nearest whole number, Bonham is superior below V standard units c) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, McKinney is superior above V standard units

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 $940,000 and variable costs of $12,800 per standard unit. The finished items sell for $28,000 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). b) Básed on the analysis of the volume, after rounding the numbers to the nearest whole number, Bonham is superior below V standard units c) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, McKinney is superior above V standard units

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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