A company that produces pleasure boats has decided to expand one of its lines. Current facilities...

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A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives, A (new location), B (subcontract), and C (expand existing facilities). Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $320,000 per year, and variable costs would be $1,100 per boat. Subcontracting would involve a cost per boat of $2,500, and expansion would require an annual fixed cost of $64,000 and a variable cost of $1,100 per boat. Expansion would result in an increase of $73,000 per year in transportation costs, subcontracting would result in an increase of $31,000 per year, and adding a new location would result in an increase of $6,100 per year. Which alternative would yield the lowest total cost for an expected annual volume of 130 boats? OA C A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives, A (new location), B (subcontract), and C (expand existing facilities). Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $320,000 per year, and variable costs would be $1,100 per boat. Subcontracting would involve a cost per boat of $2,500, and expansion would require an annual fixed cost of $64,000 and a variable cost of $1,100 per boat. Expansion would result in an increase of $73,000 per year in transportation costs, subcontracting would result in an increase of $31,000 per year, and adding a new location would result in an increase of $6,100 per year. Which alternative would yield the lowest total cost for an expected annual volume of 130 boats? OA C