Question

Make crossover chart

explanation needed

State	Fixed Cost	Variable Cost
Illinois	$10,000,000.00	$2,500.00
Florida	$20,000,000.00	$2,000.00
Virginia	$25,000,000.00	$1,000.00

Answer 1

Breakeven between Illinois and Florida = (FC of florida - FC of Illinois)/(VC of Illiois - VC of Florida)

= (20,000,000 - 10,000,000)/(2500 - 2000)

= 20000 units

Breakeven between Florida and Virginia = (FC of Virginia - FC of Florida)/(VC of Florida- VC of Virginia)

= (25,000,000 - 20,000,000)/(2000 - 1000)

= 5000 units

Hence Crossover chart:

Units below 5000 = Illinois has the least cost

Units above 5000 = Virginia has the least cost

Florida is not feasible as cost is higher at all production levels.