Assignment:
A small producer of machine tools wants to move to a larger building, and has identified two alternatives. Location A has annual fixed costs of $120,000 and variable costs of $15,000 per unit; location B has annual fixed costs of $320,000 and variable costs of $10,000 per unit. The finished items sell for $20,000 each.
a. At what volume of output would the two locations have the same total cost?
b-1. For what range of output would location A be superior? (Enter your answer as a whole number. Do not include the indifference point in your answer.)
b-2. For what range would B be superior? (Enter your answer as a whole number. Do not include the indifference point in your answer.)