Answer:
c. 2,000
Explanation:
Total Variable cost = transportation cost + inventory cost + packaging costs
Total variable cost Mode A = $240,000 + $ 100,000 + $ 120,000 = $460,000
Cost per pallets = 460,000 / 1000 = 4600
Total variable cost Mode B = $270,000 + $ 30,000 + $ 30,000 = $330,000
Cost per pallet = 330,000 / 1000 = 3300
The variable cost for both mode will be equal if the company plans to produce 2000 pallets.