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$).$

Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $$320,000$ per year, and variable costs would be $$500$ per boat. Subcontracting would involve a cost per boat of $$3,200,$ and expansion would require an annual fixed cost of $$54,000$ and a variable cost of $$1,700$ per boat.

Expansion would result in an increase of $$92,000$ per year in tr$$nsportation costs, subcontracting would result in an increase of $$30,000$ per year, and adding a new location would result in an increase of $$5,900$ per year.

Which alternative would yield the lowest total cost for an expected annual volume of $100$ boats?