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Plot the total cost lines in the graph paper

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Tamiya Sdn Bhd is considering three sites -Klebang, Taiping and Rompin - at which to open new plant. Klebang would have fixed costs of RM700 000 per year and variable costs of RM28 per standard unit produced. Taiping would have annual fixed costs of RM 1 000 000 and variable costs of RM18 per standard unit and Rompin would costs RM1 100 000 for annual fixed costs and RM20 for variable cost per unit.

a) Plot the total cost lines in the graph paper.

b) Identify the range over which each location is best.

c) For a production of 40 000 units, which site is best?

d) What are the profits of Rompin if the selling price is RM75 at 50 000 units quantity?

Reference no: EM132738569

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