Excel Products Is Planning a New Warehouse to Serve the Southeast

Multiple Choice

Excel Products is planning a new warehouse to serve the Southeast. Locations A, B, and C are under consideration. Fixed and variable costs follow:
$$\begin{array} { | l | l | l | } \hline \text { Location } & \begin{array} { l } \text { Fixed Cost } \\\text { per Year }\end{array} & \begin{array} { l } \text { Variable Cost } \\\text { per Unit }\end{array} \\\hline \mathrm { A } & \$ 2,500,000 & \$ 19 \\\mathrm {~B} & 1,500,000 & 7 \\\mathrm { C } & 2,000,000 & 9 \\\hline\end{array}$$
Plot the total cost curves in the chart provided below, and identify the range over which each location would be best. Then use break- even analysis as necessary to calculate exactly the break- even quantity that defines each range.
Which of the following statements is correct?

A) Location B is best over all volume levels.
B) The total cost of location A, if the volume is 250,000 units, is over $7,000,000.
C) Location A is the best one if volumes are quite high.
D) The break- even quantity between A and B is more than 75,000 units but less than 200,000 units.