FOR LOCATION L1:
Fixed cost = $ 11,802
Variable cost per unit = $ 2.4
Total variable cost = 2.4Q
Total cost = Fixed cost + Variable cost
Total cost = 11,802 + 2.4Q
FOR LOCATION L2:
Fixed cost = $ 6,128
Variable cost per unit = $ 4.2
Total variable cost = 4.2Q
Total cost = Fixed cost + Variable cost
Total cost = 6,128 + 4.2Q
FOR LOCATION L3:
Fixed cost = $ 8,591
Variable cost per unit = $ 3
Total variable cost = 3Q
Total cost = Fixed cost + Variable cost
Total cost = 8,591 + 3Q
At point of difference for location L2 and L3:
Total cost for location L2 = Total cost for location L3
6128 + 4.2Q = 8591 + 3Q
1.2Q = 2463
Q = 2,052.5
At point of difference for location L1 and L3:
Total cost for location L1 = Total cost for location L3
11,802 + 2.4Q = 8591 + 3Q
0.6Q = 3211
Q = 5351.667
Therefore,
(A) Range of output for location alternative 1 to yield lowest total cost:
Q ≥ 5352
(B) Range of output for location alternative 2 to yield lowest total cost:
Q ≤ 2052
(C) Range of output for location alternative 3 to yield lowest total cost:
2053 ≤ Q ≤ 5351
(D) For quantity of 1785 units,the best location is Location alternative 2.
QUESTION 6 Ang company that produces pleasure boats has decided to expand one of its lines....
Ang company that produces pleasure boats has decided to expand one of its lines. The company is considering three Location alternatives. The cost structure for each location is given as shown in the table. Location LI L2 L3 Fixed Cost/yr 13,515 8,605 6,388 variable cost/unit 2.3 3.1 4.1 (Ex. In (Ex. In a) The range of output for location alternative 1 that would yield the lowest total cost is whole number, use Q, << >, >=to specify the range) b)...
Ang company that produces pleasure boats has decided to expand one of its lines. The company is considering three Location alternatives. The cost structure for each location is given as shown in the table. Location Fixed Cost/yr variable cost/unit L1 7,958 3.1 L2 5,879 4.5 L3 11,897 2.2 a) The range of output for location alternative 1 that would yield the lowest total cost is ______ (Ex. In whole number, use Q, <, <=, >, >= to specify the range)...
QUESTION 6 Ang company that produces pleasure boats has decided to expand one of its lines. The company is considering three Location alternatives. The cost structure for each location is given as shown in the table. Location Fixed Cost/yr variable cost/unit L1 13,515 2.3 L2 8,605 3.1 L3 6,388 4.1 a) The range of output for location alternative 1 that would yield the lowest total cost is (Ex. In whole number, use Q, <, <=, >, >= to specify the...
QUESTION 6 Ang company that produces pleasure boats has decided to expand one of its lines. The company is considering three Location alternatives. The cost structure for each location is given as shown in the table. Location Fixed variable Costyr cost/unit LI 9.687 1.8 L2 6,358 2.8 L3 4,600 4.3 (Ex. In whole (Ex. In whole a) The range of output for location alternative I that would yield the lowest total cost is number, use Q. <<-> to specify the...
please show answers clearly Ang company that produces pleasure boats has decided to expand one of its lines. The company is considering three Location alternatives. The cost structure for each location is given as shown in the table Location LI L2 L3 Fixed Cost/yr 8,500 6,500 13,500 variable cost/unit 3.2 4.3 2.5 a) The range of output for location alternative that would yield the lowest total cost is (Ex. In whole number, use Q.<< >>=to specify the range) b) The...
h * Question Completion Status: QUESTION 6 Ang company that produces pleasure boats has decided to expand one of its lines. The company is considering three Location alternatives. The cost structure for each location is given as shown in the table. Location Fixed Cost/yr L1 L2 L3 7,958 5,879 11,897 variable cost/unit 3.1 4.5 2.2 (Ex. In a) The range of output for location alternative 1 that would yield the lowest total cost is whole number, use Q, <<, >,...
A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives, A (new location), B (subcontract), and C (expand existing facilities) Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $305,000 per year, and variable costs would be $550 per boat. Subcontracting would involve a cost per boat of $2,520, and expansion would require...
A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives, A (new location), B (subcontract), and C (expand existing facilities). Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $290,000 per year, and variable costs would be $570 per boat. Subcontracting would involve a cost per boat of $2,520, and expansion would require...
A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives, A (new location), B (subcontract), and C (expand existing facilities). Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $295,000 per year, and variable costs would be $590 per boat. Subcontracting would involve a cost per boat of $2,550, and expansion would require...
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