The fixed and variable costs for four potential plant sites for Brent Snyder’s Ski Supplies are shown here:

a) Graph the total-cost lines for the four potential sites.
b) Over what range of annual volume is each location the preferable one (that with lowest expected cost)?
c) If expected volume of the ski equipment is 5,000 units, which location would you recommend?

Transcribed Image Text:

SITE Atlanta Burlington Cleveland Denver FIXED COST PER YEAR $125,000 75,000 100,000 50,000 VARIABLE COST PER UNIT $6 5 4 12