Problem:
Please provide the answer to the problem below showing all the work by which the answer was derived.
Peter Billington Stereo Inc., supplies car radios to auto manufacturers and is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lower due to cheaper land costs, but the variable costs in Dallas are higher because shipping distances would increase.
Given the following costs, perform an analysis of the volume over which each location is preferable.
DALLAS DETROIT
Fixed costs $600,000 $800,000
Variable costs $28/radio $22/radio