QUESTION TWO [25] 2.1 Location Breakeven Analysis (also known as cost-volume analysis) is a technique used to make an economic comparison of location alternatives. The fixed and variable costs of three potential locations are listed below:

LOCATION	FIXED COST PER ANNUM (Rs)		VARIABLE COST PER UNIT (Rs)
A	40 000		80
B	70 000		65
C	120 000	35

The expected selling price of the product is R 150.00. The company wishes to find the most economical location for an expected volume of 2500 units per year. Plot the costs for each location, with costs on the vertical axis and annual volume on the horizontal axis and identify the location that has the lowest total cost for the expected production volume. (15)

2.2 Starbucks intends opening up a string of coffee shops in Africa. Identify the factors that would affect their location decisions. (10)