What is the break-even point for each location

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Reference no: EM132211633

Happy Toys is consideration new locations for its manufacturing plants. Costs for constructing a new facility in Biloxi are $1,600,000 and the company estimates that for every toy produced from its new product line, there would be an additional cost of $4. If the company were to locate in Ames, the new facility would cost $2,100,000 and each toy would incur a $3 incremental cost. The company plans to sell the toys to retailers for $8.

What is the break-even point for each location?

At what volume is the point of indifference?

At what forecasted volumes should Happy Toys select Biloxi as their new manufacturing location and what volumes should the company select Ames and why?

Reference no: EM132211633

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