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. Location A B C Fixed Cost 60000 80000 130000 Variable Cost 30 20 10 Write an equation to represent the total costs for each location. Draw the total costs lines for each location on the same axes. (Use output ranges of 2000, 4000, 6000, 8000 etc. and intervals of $50,000 on the Y axis. Over what range of output is location A the most preferred location? Over what range of output is location B the most preferred location? 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. Location A B C Fixed Cost 60000 80000 130000 Variable Cost 30 20 10 Write an equation to represent the total costs for each location. Draw the total costs lines for each location on the same axes. (Use output ranges of 2000, 4000, 6000, 8000 etc. and intervals of $50,000 on the Y axis. Over what range of output is location A the most preferred location? Over what range of output is location B the most preferred location? Over what range of output is location C the most preferred 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 9E
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- 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.
Location |
A |
B |
C |
Fixed Cost |
60000 |
80000 |
130000 |
Variable Cost |
30 |
20 |
10 |
- Write an equation to represent the total costs for each location.
- Draw the total costs lines for each location on the same axes. (Use output ranges of 2000, 4000, 6000, 8000 etc. and intervals of $50,000 on the Y axis.
- Over what range of output is location A the most preferred location?
- Over what range of output is location B the most preferred location?
- Over what range of output is location C the most preferred location?
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