Answer:
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Explanation:
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Answer:
The indifference point is 50,000 units.
Explanation:
Giving the following information:
Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. Location choice J has monthly fixed costs of $150,000 and per-unit variable costs of $9.
First, we need to determine the total cost formula for each location:
Location I:
Total cost= 100,000 + 10x
Location J:
Total cost= 150,000 + 9x
Now, to calculate the indifference point, we need to isolate X:
100,000 + 10x= 150,000 + 9x
x= 50,000 units
The indifference point is 50,000 units.
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