Consider the two capacity options for Arktec Manufacturing shown below. Suppose the company has identified the following three possible demand scenarios. Fixed cost (per year) Variable cost (per unit) Option 1 $600 comma 000600,000 $55 Option 2 $150 comma 000150,000 $1616 Demand (units per year) Probability 20 comma 00020,000 4040 % 55 comma 00055,000 5050 % 190 comma 000190,000 1010% a. The expected cost for Option 1 is Senter your response here. (Enter your response as a whole number.)

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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am. 114.

Consider the two capacity options for Arktec Manufacturing shown below. Suppose the company has identified
the following three possible demand scenarios. Fixed cost (per year) Variable cost (per unit) Option 1 $600
comma 000600,000 $55 Option 2 $150 comma 000150,000 $1616 Demand (units per year) Probability 20
comma 00020,000 4040 % 55 comma 00055,000 5050 % 190 comma 000190,000 1010% a. The expected
cost for Option 1 is Senter your response here. (Enter your response as a whole number.)
Transcribed Image Text:Consider the two capacity options for Arktec Manufacturing shown below. Suppose the company has identified the following three possible demand scenarios. Fixed cost (per year) Variable cost (per unit) Option 1 $600 comma 000600,000 $55 Option 2 $150 comma 000150,000 $1616 Demand (units per year) Probability 20 comma 00020,000 4040 % 55 comma 00055,000 5050 % 190 comma 000190,000 1010% a. The expected cost for Option 1 is Senter your response here. (Enter your response as a whole number.)
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