Table 13.8
An operations manager has narrowed down the search for a new plant for Tim! to three locations. Fixed and variable costs follow.

-Use the information in Table 13.8 to determine the best statement.
A) Location C is the best one if volumes are quite high.
B) Location A becomes the most expensive place to produce at volumes in excess of 2,000.
C) The break-even quantity between A and B is less than or equal to 5,000 units.
D) The break-even quantity between C and B is more than 30,000 units.

Question

Table 13.8
An operations manager has narrowed down the search for a new plant for Tim! to three locations. Fixed and variable costs follow.
 
-Use the information in Table 13.8 to determine the best statement.
A) Location C is the best one if volumes are quite high. 
B) Location A becomes the most expensive place to produce at volumes in excess of 2,000. 
C) The break-even quantity between A and B is less than or equal to 5,000 units. 
D) The break-even quantity between C and B is more than 30,000 units.

Quizplus · Accepted Answer

Without the specific details from Table 13.8, we can infer that option A is correct based on general knowledge about break-even analysis and cost-volume relationships. High volumes typically favor locations with lower variable costs, even if fixed costs are higher.

Table 13.8 an Operations Manager Has Narrowed Down the Search for a for a New