Dennison Manufacturing makes large helical springs used in aircraft landing gear. The company has narrowed its potential choices for its new manufacturing facilityto four cities. The following information is known about the manufacturing and shipping costs of locating in each of these four cities:Variable ManufacturingVariable ShippingFixed Costsper YearCosts per UnitCosts per UnitPhoenix$350,000$70.00$5.00Buffalo$600,000$51.00$4.00Seattle$1.400,000$34.00$2.00Atlanta$1,650,000$35.00$5.00a. Use break-even point analysis to determine where Darren should locate.Quantity per YearChoiceless than unitsbetween andunitsmore thanunits

Let the demand = Q Total cost = Fixed cost + Veriable cost

Dennison Manufacturing makes large helical springs used in aircraft landing gear. The company has narrowed its potential choices for its to four cities. The following information is known about the manufacturing and shipping costs of locating in each of these four cities: Fixed Costs per Year $350,000 Variable Manufacturing Costs per Unit $70.00 Variable Shipping Costs per Unit $5.00 Phoenix Buffalo $600,000 $51.00 $34.00 $4.00 Seattle $1,400,000 $2.00 $5.00 Atlanta $1,650,000 $35.00 a. Use break-even point analysis to determine where Darren should locate. Quantity per Year units Choice less than between and units more than units

Dennison Manufacturing makes large helical springs used in aircraft landing gear. The company has narrowed its potential choices for its to four cities. The following information is known about the manufacturing and shipping costs of locating in each of these four cities: Fixed Costs per Year $350,000 Variable Manufacturing Costs per Unit $70.00 Variable Shipping Costs per Unit $5.00 Phoenix Buffalo $600,000 $51.00 $34.00 $4.00 Seattle $1,400,000 $2.00 $5.00 Atlanta $1,650,000 $35.00 a. Use break-even point analysis to determine where Darren should locate. Quantity per Year units Choice less than between and units more than units

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Dennison Manufacturing makes large helical springs used in aircraft landing gear. The company has narrowed its potential choices for its new manufacturing facility
to four cities. The following information is known about the manufacturing and shipping costs of locating in each of these four cities:
Variable Manufacturing
Variable Shipping
Fixed Costs
per Year
Costs per Unit
Costs per Unit
Phoenix
$350,000
$70.00
$5.00
Buffalo
$600,000
$51.00
$4.00
Seattle
$1.400,000
$34.00
$2.00
Atlanta
$1,650,000
$35.00
$5.00
a. Use break-even point analysis to determine where Darren should locate.
Quantity per Year
Choice
less than units
between and
units
more than
units

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