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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: Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs of $14,000 per standard unit produced. McKinney would have annual fixed costs of $940,000 and variable costs of $12,800 per standard unit. The finished items sell for $28,000 each. a) The volume of output at which both the locations have the same profit = standard units (round your response to the nearest whole number). b) Básed on the analysis of the volume, after rounding the numbers to the nearest whole number, Bonham is superior below V standard units c) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, McKinney is superior above V standard units

Peggy Lane Corp.., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs of $14,000 per standard unit produced. McKinney would have annual fixed costs of $940,000 and variable costs of $12,800 per standard unit. The finished items sell for $28,000 each. a) The volume of output at which both the locations have the same profit = standard units (round your response to the nearest whole number). b) Básed on the analysis of the volume, after rounding the numbers to the nearest whole number, Bonham is superior below V standard units c) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, McKinney is superior above V standard units

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter13: The Balanced Scorecard: Strategic-based Control
Section: Chapter Questions
Problem 24P: Lander Parts, Inc., produces various automobile parts. In one plant, Lander has a manufacturing cell...
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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: Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs of $14,000 per standard unit produced. McKinney would have annual fixed costs of $940,000 and variable costs of $12,800 per standard unit. The finished items sell for $28,000 each. a) The volume of output at which both the locations have the same profit = standard units (round your response to the nearest whole number). b) Básed on the analysis of the volume, after rounding the numbers to the nearest whole number, Bonham is superior below standard units. c) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, McKinney is superior above standard units. d) The break-even point for Bonham is units. (Enter your response rounded to the nearest whole number.)
Transcribed Image Text:Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs of $14,000 per standard unit produced. McKinney would have annual fixed costs of $940,000 and variable costs of $12,800 per standard unit. The finished items sell for $28,000 each. a) The volume of output at which both the locations have the same profit = standard units (round your response to the nearest whole number). b) Básed on the analysis of the volume, after rounding the numbers to the nearest whole number, Bonham is superior below standard units. c) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, McKinney is superior above standard units. d) The break-even point for Bonham is units. (Enter your response rounded to the nearest whole number.)
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