Question: Find out the lowest-cost range for multiple locations. Fixed and variable costs for the four potential plant locations are shown in the table below: Location

  1. Find out the lowest-cost range for multiple locations. Fixed and variable costs for the four potential plant locations are shown in the table below:

Location

Fixed Cost

Variable Cost

A

$105,000

$12

B

$63,000

$15

C

$130,000

$8

D

$110,000

$7

The actual output of the mentioned locations is 11,000 units per year.

a. Find out the total cost of each location? (20 Point)

b. Plot the total cost lines for these locations on a single graph. (15 Point)

c. Identify the range of output for which each location has the lowest total cost. (5 Point)

d.If expected output at the selected location is to be 5000 units per year, which alternative would provide the lowest total cost? (5 Point)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!