Choose either $1,350,000 or $1,750,000 to be the more appropriate fixed cost for a product layout, and consider the other value as the fixed cost for a process layout. Similarly, choose either $240 or $310 to be the variable costs for the layouts. Finally, assume a selling price per unit equal to $395.
(a) Find the level of production at which the two layouts are identical from a cost point of view.
(b) Find the level of production at which the process layout starts being profitable.
(c) Which layout is most cost-effective for a production level equal to 17,000 units?