APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 82

Location X has monthly fixed costs of $100,000 and per-unit variable costs of $10. Location Y has monthly fixed costs of $150,000 and per-unit variable costs of $9. At what volume would these locations have equal total costs?

Answer options

• A. 13,157
• B. 19,000
• C. 50,000
• D. 250,000

Correct answer: C

Explanation

To find the break-even volume where both locations have equal total costs, we set the total cost equations equal to each other: 100,000 + 10x = 150,000 + 9x. Solving for x gives us 50,000 units. The other options do not satisfy the equation and thus cannot be the correct answer.