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A car manufacture company wants to build a new production facility. The marketing has developed a feasibility study that suggests two possible capacities of 200,000
A car manufacture company wants to build a new production facility. The marketing has developed a feasibility study that suggests two possible capacities of 200,000 or 250,000 units per year for the new facility. The 200,000- unit plant would have an annual fixed cost of $4 million and a per unit production cost of $20. The 250,000-unit plant would have an annual fixed cost of $6 million and a per unit cost of $15. The parts will be sold for an average price of $60 per unit.
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