Question: hj Q7 Determine all relevant costs for each location. Classify the location for each location in to annual fixed cost and variable cost per unit.

hj Q7 Determine all relevant costs for each

Q7 Determine all relevant costs for each location. Classify the location for each location in to annual fixed cost and variable cost per unit. Plot the total costs associated with each location on a single chart of annual cost versus annual volume. Selwct the location with the lowest total annual cost(TC) at the expected production volume. 7 Question: Potential locations A,B and C have the cost structures shown below for manufacturing a product expected to sell for Rs 2700 per unit. Find the most economical location for an expected volume of 2000 units per year. Site A Fixed Cost/year 6,000,000 7,000,000 5,000,000 Variable Cost/Unit 1500 500 4000

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