A home furnishing company is trying to compare three convenient alternative locations To establish the new factory, and you have data about the expected costs of establishing a new factory As in the following table: (A, B, C) in three governorates:

 

 

                                                                                                                                                                                                                                                                                                                               

               sale price  per one                variable cost, per unit                 Annual fixed costs                 Site

                   

 (  A  )                 30 000                                 80                           130    

(  B  )                  90 000                                 50                           130                  

(  C  )                  120 000                               20                           130   

 


Required: 

1- Draw a line for total costs for each site, using the site break-even analysis for the production volume Expected (4,000) pieces of furniture. Indicating the best location when the volume of production (3 000) units.

 2- Determine the best location within each of the expected annual production ranges and up to (5,000) pieces.

3- Calculate the expected profit in the best location when the production volume of (3 000) pieces.

Answer rating: 100% (QA)

Total cost equations TCA 80Q 30000 TCB 50Q 90000 TCC 20Q 120000 1 Total cost 2 300000 3 250000 ... View the full answer