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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Definitions:

Kelley's Model

A psychological theory that suggests how individuals attribute causes to events based on consistency, distinctiveness, and consensus information.

Consistency

The quality of always acting or behaving in the same way, leading to predictability and reliability in one's actions or beliefs.

Bad Luck

A concept describing an outcome or series of outcomes that are unfavorable and not within one's control, often attributed to chance.

Shame

A painful emotion resulting from the consciousness of wrongdoing or failing to meet societal standards, often involving feelings of embarrassment and guilt.