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 location considered for a new manufacturing facility.
LOCATION
ANNUAL FIXED COSTS
UNIT VARIABLE COSTS
Site A
$25,000
$11
Site B
$20,000
$19
A. The breakeven point for these two locations is 625 units per year
B. The breakeven point for these two locations is 600 units per year
C. Site A is the desired location if the production rate is 500 units per year
D. Site B is the desired location if the production rate is 800 units per year
Answer: A
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