Example23 H.W.: A company planning to manufacture Webcams has to decide on the location of the production facility. Three location are being considered A, B and C. the fixed costs at the three locations are estimated to be $40000, $65000, and $32000 per year respectively. The variable costs are $4, $2.5 and $4.5 per unit, selling price in three location is $110, $180 and $90 respectively. Maximum capacity is 12000 unit/year in A, 19500 unit/year in B and 9600 unit/year in C. Find the following below: 1- Break- Even quantity in three location 2- Profit or loss in location A when quantity is 400 and 300 3- Profit or loss in location B when quantity is 350 and 450 4- Profit or loss in location C when quantity is 425 and 325 5- Maximum revenues in A, B and C 6- Range of profit at Demand in A, B and C Sketch the Break - Even chart each three location

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 5E
Question

A company planning to manufacture Webcams has to decide on the location of the production facility. Three location are being considered A, B and C. the fixed costs at the three locations are estimated to be $40000, $65000, and $32000 per year respectively. The variable costs are $4, $2.5 and $4.5 per unit, selling price in three location is $110, $180 and $90 respectively. Maximum capacity is 12000 unit/year in A, 19500 unit/year in B and 9600 unit/year in C. Find the following below:

1- Break- Even quantity in three location
2- Profit or loss in location A when quantity is 400 and 300 3- Profit or loss in location B when quantity is 350 and 450 4- Profit or loss in location C when quantity is 425 and 325 5- Maximum revenues in A, B and C
6- Range of profit at Demand in A, B and C

Sketch the Break – Even chart each three location

Example23 H.W.: A company planning to manufacture Webcams
has to decide on the location of the production facility. Three
location are being considered A, B and C. the fixed costs at the three
locations are estimated to be $40000, $65000, and $32000 per year
respectively. The variable costs are $4, $2.5 and $4.5 per unit,
selling price in three location is $110, $180 and $90 respectively.
Maximum capacity is 12000 unit/year in A, 19500 unit/year in B
and 9600 unit/year in C. Find the following below:
1- Break- Even quantity in three location
2- Profit or loss in location A when quantity is 400 and 300
3- Profit or loss in location B when quantity is 350 and 450
4- Profit or loss in location C when quantity is 425 and 325
5- Maximum revenues in A, B and C
6- Range of profit at Demand in A, B and C
Sketch the Break - Even chart each three location
Transcribed Image Text:Example23 H.W.: A company planning to manufacture Webcams has to decide on the location of the production facility. Three location are being considered A, B and C. the fixed costs at the three locations are estimated to be $40000, $65000, and $32000 per year respectively. The variable costs are $4, $2.5 and $4.5 per unit, selling price in three location is $110, $180 and $90 respectively. Maximum capacity is 12000 unit/year in A, 19500 unit/year in B and 9600 unit/year in C. Find the following below: 1- Break- Even quantity in three location 2- Profit or loss in location A when quantity is 400 and 300 3- Profit or loss in location B when quantity is 350 and 450 4- Profit or loss in location C when quantity is 425 and 325 5- Maximum revenues in A, B and C 6- Range of profit at Demand in A, B and C Sketch the Break - Even chart each three location
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