Question: Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $ 2 6 0 , 0 0 0 per

Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $260,000 per year, and variable costs would be $520 per boat. Subcontracting would involve a cost per boat of $2,540, and expansion would require an annual fixed cost of $51,000 and a variable cost of $1,060 per boat.

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