Reference no: EM1381161
A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: Atlanta: fixed costs (annual)= 80000, vairable costs (per unit)=20 Phoenix: fixed costs= 140000, variable costs = 16 1. At what annual output would the company be indifferent between the two locations? 10,000 units 20,000 units 4,000 units 15,000 units 60,000 units 2. What would the total annual costs be for the Phoenix location with an annual output of 10,000 units? $140,000 $220,000 $280,000 $300,000 $156,000 3. What would be the total annual costs at the point of indifference? $300,000 $760,000 $240,000 $380,000 $220,000 4. If annual demand is estimated to be 20,000 units, which location should the company select? either Atlanta or Phoenix reject both Atlanta and Phoenix Phoenix Atlanta build at both locations 5. If the annual demand will be 20,000 units, what would be the cost advantage of the better location? $60,000 $460,000 $20,000 $480,000 $80,000
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