3. West Calder Fabrication is trying to decide in which of the following three cities to locate a newproduction facility, and has gathered the following information about each: (NoteshaperScenario #28)CitySingaporeHong KongNiagara FallsAnnual Fixed Costs$40,000$30,000$10,000Variable Costs (per unit)$1$3$5If this facility will produce 5,000 units annually, where should West Calder locate it?a.b. What is the point of indifference between Singapore and Hong Kong? Over what range of production levels would West Calder Fabrication prefer to be in NiagaraFalls? (Use 0, 10000, 20000, 30000, 40000 as your volume levels to set up your graph)C.

Cost allocation: Cost allocation is a process of assigning or allocating indirect costs to each and…

Answered: a. If this facility will produce 5,000…

a. If this facility will produce 5,000 units annually, where should West Calder locate it? b. What is the point of indifference between Singapore and Hong Kong?

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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Question

3. West Calder Fabrication is trying to decide in which of the following three cities to locate a new
production facility, and has gathered the following information about each: (Noteshaper
Scenario #28)
City
Singapore
Hong Kong
Niagara Falls
Annual Fixed Costs
$40,000
$30,000
$10,000
Variable Costs (per unit)
$1
$3
$5
If this facility will produce 5,000 units annually, where should West Calder locate it?
a.
b. What is the point of indifference between Singapore and Hong Kong?

Over what range of production levels would West Calder Fabrication prefer to be in Niagara
Falls? (Use 0, 10000, 20000, 30000, 40000 as your volume levels to set up your graph)
C.

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