Assignment:
The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown:
| SITE |
Fixed cost per year |
Variable cost per unit |
|
| 1 |
$500 |
$11 |
|
| 2 |
1,000 |
7 |
|
| 3 |
1,700 |
4 |
|
a) Over what range of production is each location optimal?
b) For a production of 200 units, which site is best?
Provide complete and step by step solution for the question and show calculations and use formulas.