Explanation about lowest total cost

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Explanation about Lowest total cost

Problem- 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).

Part 1- Alternative A would involve substantial fixed costs but relatively low variable costs- fixed costs would be $300,000 per year, and variable costs would be $570 per boat. Subcontracting would involve a cost per boat of $2550, and expansion would require an annual fixed cost of $61,000 and a variable cost of $1,070 per boat.

Part 2- Find the range of output for each alternative that would yield the lowest total cost. (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to the nearest whole number.)

A. ______ or more.

B. ______ to _____.

C. ______ to _____. .......I found the answers but not sure what formula I need to work to get these? Please help, I need to know how to work this!

I need help to describe the lowest total cost and a graph and equations are provided. Step-by-step explanations are given.

Reference no: EM13710185

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