A retired auto mechanic hopes to open a rustproofing shop. Customers would be local new-car dealers. Two locations are being considered, one in the center of the city and one on the outskirts. The central city location would involve fixed monthly costs of $6,925 and labor, materials, and transportation costs of $30 per car. The outside location would have fixed monthly costs of $4,325 and labor, materials, and transportation costs of $38 per car. Dealer price at either location will be $97 per car. a. Which location will yield the greatest profit if monthly demand is (1) 320 cars? (2) 420 cars? yields the greatest profit. yields the greatest profit. 320 cars: Outside 420 cars: City b. At what volume of output will the two sites yield the same monthly profit? Volume of output cars

A retired auto mechanic hopes to open a rustproofing shop. Customers would be local new-car dealers. Two locations are being considered, one in the center of the city and one on the outskirts. The central city location would involve fixed monthly costs of $6,925 and labor, materials, and transportation costs of $30 per car. The outside location would have fixed monthly costs of $4,325 and labor, materials, and transportation costs of $38 per car. Dealer price at either location will be $97 per car. a. Which location will yield the greatest profit if monthly demand is (1) 320 cars? (2) 420 cars? yields the greatest profit. yields the greatest profit. 320 cars: Outside 420 cars: City b. At what volume of output will the two sites yield the same monthly profit? Volume of output cars

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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