FIXED COST PER YEAR VARIABLE COST PER UNIT SITE Atlanta $125,000 $6 Burlington 75,000 Cleveland 100,000 4 Denver 50,000 12 5.

Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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The fixed and variable costs for four potential plant sites for Brent Snyder's Ski Supplies are shown here:                                                                                                                                                            a) Graph the total-cost lines for the four potential sites.
b) Over what range of annual volume is each location the preferable one (that with lowest expected cost)?
c) If expected volume of the ski equipment is 5,000 units, which location would you recommend?
FIXED COST
PER YEAR
VARIABLE
COST PER
UNIT
SITE
Atlanta
$125,000
$6
Burlington
75,000
Cleveland
100,000
4
Denver
50,000
12
5.
Transcribed Image Text:FIXED COST PER YEAR VARIABLE COST PER UNIT SITE Atlanta $125,000 $6 Burlington 75,000 Cleveland 100,000 4 Denver 50,000 12 5.
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ISBN:
9780357033791
Author:
Pride, William M
Publisher:
South Western Educational Publishing