Use the Breakeven Model to Determine Which of the Statements

question 23

Multiple Choice

Use the breakeven model to determine which of the statements below is TRUE according to the information provided in the table relating to two different locations considered for a new manufacturing facility.LOCATION ANNUAL FIXED COSTS
UNIT VARIABLE COSTS
Site A
$50,000
$10
Site B
$20,000
$30

• A)Site A is the desired location if the production rate is 1000 units per year
• B)The breakeven point for these two locations is 1500 units per year
• C)Site B is the desired location if the production rate is 2000 units per year
• D)The breakeven point for these two locations is 500 units per year

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