Question: Cunningham Products is evaluating five possible locations to build a distribution center. Data estimated from the accounting department are provided below. The annual production is
Cunningham Products is evaluating five possible locations to build a distribution center. Data estimated from the accounting department are provided below. The annual production is estimated to be 20,000 units.
| CP Location Analysis Data | Location 1 | Location 2 | Location 3 | Location 4 | Location 5 |
| Fixed costs | $65,000.00 | $120,000.00 | $104,000.00 | $115,000.00 | $120,000.00 |
| Direct material cost/unit | $4.22 | $4.65 | $5.20 | $4.50 | $4.50 |
| Direct labor cost/unit | $12.55 | $13.70 | $11.90 | $15.70 | $14.00 |
| Overhead/unit | $2.50 | $2.40 | $1.80 | $2.70 | $2.20 |
| Transportation cost/unit | $0.45 | $0.60 | $0.40 | $0.76 | $0.63 |
A. Calculate the total cost for each location. Round your answers to the nearest dollar.
| Location 1 | Location 2 | Location 3 | Location 4 | Location 5 | |
| Total costs | $ | $ | $ | $ | $ |
Which location provides the least cost? a.Location 1
-
Location 2
-
Location 3
-
Location 4
-
Location 5
B. For what range of demand would each location be best?
Location1:
Location 2:
Location 3.
Location 4:
Location 5:
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