Little Leapers Playground Equipment has outgrown its current facility, and wants to relocate to a venue with more space.
The Board of Directors have found two candidate locations. Location A has annual fixed costs of $130,000 and variable costs of $10,000 per unit; location B has annual fixed costs of $330,000 and variable costs of $8,000 per unit. The price to the customer for each playground set is $12,000.
a. For what output level would A and B cost Little Leapers the same?
b-1. For what output range would A be preferred? (Enter your answer as a whole number. Do not include the indifference point in your answer.)
b-2. For what output range would B be preferred? (Enter your answer as a whole number. Do not include the indifference point in your answer.)