Reference no: EM132973279
The management must determine which city should be chosen that can save the company's expenses. To calculate the cost in each location, the management determines the fixed costs and variable costs in each city as follows
Name of City, Fixed cost/year, Variable cost/unit, Percentage(%)
Bekasi, IDR 70,000,000,000, IDR 330,000,000, 100%
Bogor, IDR 86,000,000,000, IDR 320,000,000, 75%
Tangerang, IDR 60,000,000,000, IDR 210,000,000, 80%
Depok, IDR 75,000,000,000, IDR 200,000,000, 100%
Question:
a. Calculate the cost for each location?
b. Which location provides cost efficiency?
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