A manufacturing firm is considering two locations for a plant to produce a new prod- uct. Location A has a fixed cost of $80,000 and a variable cost of $20 per unit. Loca- tion B has a fixed cost of $120,000 and a variable cost of $15 per unit. The firm plans to manufacture 20,000 units a year at the plant. Where should the plant be located?
A manufacturing firm is considering two locations for a plant to produce a new prod- uct. Location A has a fixed cost of $80,000 and a variable cost of $20 per unit. Loca- tion B has a fixed cost of $120,000 and a variable cost of $15 per unit. The firm plans to manufacture 20,000 units a year at the plant. Where should the plant be located?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:A manufacturing firm is considering two locations for a plant to produce a new prod-
uct. Location A has a fixed cost of $80,000 and a variable cost of $20 per unit. Loca-
tion B has a fixed cost of $120,000 and a variable cost of $15 per unit. The firm plans
to manufacture 20,000 units a year at the plant. Where should the plant be located?
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