TOSSEK Manufacturing is a company offering a variety of electric scooters utilizing lithium iron phosphate batteries. To date, the TOSSEK Manufacturing company is considering three sites which are A, B, and C to locate a new factory for manufacturing its new model of electric scooters, the Gusto E-Bike. The firm knows it will produce up to 60,000 Gusto E-Bike at the new plant each year. The goal is to locate at a minimum-cost site, where cost is measured by the annual fixed plus variable costs of production. TOSSEK Manufacturing company has gathered the following data in Table 1 as follows:
TOSSEK Manufacturing is a company offering a variety of electric scooters utilizing lithium iron phosphate batteries. To date, the TOSSEK Manufacturing company is considering three sites which are A, B, and C to locate a new factory for manufacturing its new model of electric scooters, the Gusto E-Bike. The firm knows it will produce up to 60,000 Gusto E-Bike at the new plant each year. The goal is to locate at a minimum-cost site, where cost is measured by the annual fixed plus variable costs of production. TOSSEK Manufacturing company has gathered the following data in Table 1 as follows:
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
variable cost
A=2670
B=1170
C=2170
![TOSSEK Manufacturing is a company offering a variety of electric scooters
utilizing lithium iron phosphate batteries. To date, the TOSSEK
Manufacturing company is considering three sites which are A, B, and C to
locate a new factory for manufacturing its new model of electric scooters, the
Gusto E-Bike. The firm knows it will produce up to 60,000 Gusto E-Bike at
the new plant each year. The goal is to locate at a minimum-cost site, where
cost is measured by the annual fixed plus variable costs of production.
TOSSEK Manufacturing company has gathered the following data in Table 1
as follows:
Table 1: Annual fixed and variable cost for TOSSEK Manufacturing
Variable cost per auto
produced
Site
Annual fixed cost
10,000,000
25,000,000
20,000,000
C
Sketch the appropriate graph and evaluate the optimal range of volume
for each site.
(ii)
If company decide to choose site C, evaluate and justify the optimal
values of volume produced at the lowest cost.
AB](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F47c29b97-509c-4744-8b02-5c9c99100ba9%2F27e50afc-6e80-4cd4-ab50-a3ec35dd0ae2%2F1j6t7ql_processed.jpeg&w=3840&q=75)
Transcribed Image Text:TOSSEK Manufacturing is a company offering a variety of electric scooters
utilizing lithium iron phosphate batteries. To date, the TOSSEK
Manufacturing company is considering three sites which are A, B, and C to
locate a new factory for manufacturing its new model of electric scooters, the
Gusto E-Bike. The firm knows it will produce up to 60,000 Gusto E-Bike at
the new plant each year. The goal is to locate at a minimum-cost site, where
cost is measured by the annual fixed plus variable costs of production.
TOSSEK Manufacturing company has gathered the following data in Table 1
as follows:
Table 1: Annual fixed and variable cost for TOSSEK Manufacturing
Variable cost per auto
produced
Site
Annual fixed cost
10,000,000
25,000,000
20,000,000
C
Sketch the appropriate graph and evaluate the optimal range of volume
for each site.
(ii)
If company decide to choose site C, evaluate and justify the optimal
values of volume produced at the lowest cost.
AB
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