Peggy Lane Corp. a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: Bo

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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: Bo

nham and Mckinney. Bonham would have fixed costs of _$820,000_____ per year and variable costs of __$15,000_____ per standard unit produced. McKinney would have annual fixed costs of 920,000______ and variable costs of __13,9000____ per standard unit. The finished items sell for _28,000_____ eacha) The volume of output at which both the locations have the same profit= ____ Standard units (round to nearest whole number)d) the breakeven point for bonham is ___ unitsThe breakeven point for Mckinney is _____ units

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Mariulka [3.8K] · Answer 1 · 2026-03-17T19:02:43+03:00

Here are the steps outlined below: Explanation: Two possible sites are being considered: Bonham: Fixed costs total $820,000 with variable costs at $15,000 per unit. McKinney: Fixed costs are $920,000 and variable costs are $13,900 per unit. Setting the equations: Bonham = 820,000 + 15,000x; McKinney = 920,000 + 13,900x. Solving these gives us

820,000 + 15,000x = 920,000 + 13,900x. This results in

1,100x = 100,000, thus x = 91 units. For the break-even analysis: 1) Break-even point = fixed costs / contribution margin for Bonham: 820,000 / (28,000 - 15,000) = 63 units. Similarly, for McKinney, the break-even is 920,000 / (28,000 - 13,900) = 65 units.