A ski equipment manufacturer is planning to build a manufacturing plant in Europe. The fixed and variable costs (in U.S dollars) for four potential plant sites are shown as follows:

1. Graph the total-cost lines for the four potential sites.

2. Over what range of annual production volume is each location optimal?

3. If the expected production volume of the ski equipment is 8,000 units, which location would you recommend?

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Fixed Cost per Year Variable Cost per Unit Potential Site Bern, Switzerland Vienna, Austria Brussels, Belgium Zagreb, Croatia $150,000 85,000 100,000 $ 5 4 50.000 12