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An operations manager has narrowed down the search for a new King Kola plant to three locations. Fixed and variable costs follow. Location Fixed Cost Variable Cost A $100,000 $10 B $150,000 $7 C $200,000 $5   Plot the total cost curves in the chart provided above and identify the range over which each location would be best.     Use break-even analysis to calculate exactly the break-even quantity that defines each range.

An operations manager has narrowed down the search for a new King Kola plant to three locations. Fixed and variable costs follow. Location Fixed Cost Variable Cost A $100,000 $10 B $150,000 $7 C $200,000 $5   Plot the total cost curves in the chart provided above and identify the range over which each location would be best.     Use break-even analysis to calculate exactly the break-even quantity that defines each range.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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  1. An operations manager has narrowed down the search for a new King Kola plant to three locations. Fixed and variable costs follow.

Location

Fixed Cost

Variable Cost

A

$100,000

$10

B

$150,000

$7

C

$200,000

$5

 

  1. Plot the total cost curves in the chart provided above and identify the range over which each location would be best.

 

 

  1. Use break-even analysis to calculate exactly the break-even quantity that defines each range. 
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