c. The manager of a car soft drinks facility wants to expand its operations in the coming year. He wants to build a new facility to do so. There are three possible locations for this facility. The fixed and variable costs involved are given in the table below:- Locations Costs Fixed A B C 500,000 600,000 800,000 20 Variable 40 30 ii. i. Based on costs, over what range of units will location A be preferred? Based on costs, over what range of units will location B be preferred? iii. Based on costs, over what range of units will location C be preferred? N.B. Show all working.

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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c. The manager of a car soft drinks facility wants to expand its operations in the coming year. He wants to build
a new facility to do so. There are three possible locations for this facility. The fixed and variable costs involved
are given in the table below:-
Locations
Costs
A
B
C
Fixed
500,000
600,000
800,000
20
Variable
40
30
i. Based on costs, over what range of units will location A be preferred?
ii. Based on costs, over what range of units will location B be preferred?
iii. Based on costs, over what range of units will location C be preferred?
N.B. Show all working.
Transcribed Image Text:c. The manager of a car soft drinks facility wants to expand its operations in the coming year. He wants to build a new facility to do so. There are three possible locations for this facility. The fixed and variable costs involved are given in the table below:- Locations Costs A B C Fixed 500,000 600,000 800,000 20 Variable 40 30 i. Based on costs, over what range of units will location A be preferred? ii. Based on costs, over what range of units will location B be preferred? iii. Based on costs, over what range of units will location C be preferred? N.B. Show all working.
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