Mr. Jack is in the process of expanding his manufacturing business. He decided to open a plant in the coming year. He has four locations in mind. The costs information for these locations is in the following table. locations fixed costs variable costs/units A 60,000 30 B 80,000 20 C 100,000 15 D 130,000 10 i. Draw the total costs lines for each location on the same axes. (Use output ranges of 200, 400, 600, 800 etc. and intervals of $50,000 on the Y axis. ii. Over what range of output is location A the most preferred location? iii. Over what range of output is location B the most preferred location? iv. Over what range of output is location C the most preferred location?
Mr. Jack is in the process of expanding his manufacturing business. He decided to open a plant in the coming year. He has four locations in mind. The costs information for these locations is in the following table. locations fixed costs variable costs/units A 60,000 30 B 80,000 20 C 100,000 15 D 130,000 10 i. Draw the total costs lines for each location on the same axes. (Use output ranges of 200, 400, 600, 800 etc. and intervals of $50,000 on the Y axis. ii. Over what range of output is location A the most preferred location? iii. Over what range of output is location B the most preferred location? iv. Over what range of output is location C the most preferred location?
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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Transcribed Image Text:Mr. Jack is in the process of expanding his manufacturing business. He decided to open a plant in the
coming year. He has four locations in mind.
The costs information for these locations is in the following table.
locations
fixed costs
variable costs/units
A
60,000
30
B
80,000
20
C
100,000
15
D
130,000
10
i. Draw the total costs lines for each location on the same axes. (Use output ranges of 200, 400, 600,
800 etc. and intervals of $50,000 on the Y axis.
ii. Over what range of output is location A the most preferred location?
iii. Over what range of output is location B the most preferred location?
iv. Over what range of output is location C the most preferred location?
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