Discuss the below:
Q1. Plot the total cost curves for the four plant locations on a single graph.
Q2. Compute the range of demand for which each location has a cost advantage.
Q3. Which plant location is best if demand is 35,000 units?
| Location |
Annual Fixed Cost |
Unit Variable Cost |
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|
|
| A |
$250,000 |
$55 |
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|
|
|
| B |
$350,000 |
$35 |
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|
|
|
| C |
$400,000 |
$25 |
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|
|
|
| D |
$550,000 |
$20 |