Question: QUESTION 1 The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown: Site Sibu Subang Johor Bahru

QUESTION 1 The fixed and variable costs for three

QUESTION 1 The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown: Site Sibu Subang Johor Bahru Fixed cost per year (RM) 500 1,000 1,700 Variable cost per year (RM) 11 7 4 The company wishes to find the most economical location for an expected volume of 2,000 units per year. a) Build an Excel linear graph (Cost vs Production Volume) Production Sibu Subang Johor Bahru Volume (Unit) (RM) (RM) (RM) 0 500 2000 (4 marks) b) For a production volume less than 20, which site is the cheapest? (2 marks) c) For a production volume more than 500 units, which site is the cheapest? (2 marks)

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