A plastic manufacturing company is considering 2 alternative locations for a new facility. The management considered 2 alternatives: Sta. Rosa and Sta. Rita. The fixed costs for Sta. Rosa is Php1M and variable cost is Php25 per unit. On the other hand, the fixed costs for Sta. Rita is Php1.5M and variable cost is Php23 per unit. 1. If the company plans on producing 50,000 units which location would be more attractive? 2. At what volume the two alternatives equal in cost?
A plastic manufacturing company is considering 2 alternative locations for a new facility. The management considered 2 alternatives: Sta. Rosa and Sta. Rita. The fixed costs for Sta. Rosa is Php1M and variable cost is Php25 per unit. On the other hand, the fixed costs for Sta. Rita is Php1.5M and variable cost is Php23 per unit. 1. If the company plans on producing 50,000 units which location would be more attractive? 2. At what volume the two alternatives equal in cost?
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Transcribed Image Text:A plastic manufacturing company is considering 2 alternative locations for a new facility. The management considered 2
alternatives: Sta. Rosa and Sta. Rita. The fixed costs for Sta. Rosa is Php1M and variable cost is Php25 per unit. On the other hand,
the fixed costs for Sta. Rita is Php1.5M and variable cost is Php23 per unit.
1. If the company plans on producing 50,000 units which location would be more attractive?
2. At what volume the two alternatives equal in cost?
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