A manufacturing company preparing to build a new plant is considering three potential locations for it....
A manufacturing company preparing to build a new plant is considering three potential locations for it. The fixed and variable costs for the three alternative locations are presented in Table 1.
| Costs | A | B | C |
| Fixed | 50,000 | 600,000 | 800,000 |
| Variable | 40 | 30 | 20 |
i. Indicate over what range, each of the alternatives A, B, C is the low-cost choice.
Homework Answers
Break-even analysis is a technique by which business identify the sales volume when the total cost and total revenue is equal. So, the company neither makes profit nor loss.
Break-even analysis is important for business because it help in drafting good business plan by determining cost structure and the volume required to cover the cost in order to make profit.
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A manufacturing company preparing to build a new plant is
considering three potential locations for it....
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