A company that produces pleasure boats has decided to expend one of its ines. Current facilitios are insutricient to handle the increased workload, so the company is considering three alternotives, A (new location), B (subcontract), and C (expond existing faclities). Alternative A would involve substantial fixed costs but refatively low variable costs: flxed costs would be $290,000 per year, and variable costs would be $900 per boot. Subcontracting would involve a cost per boat of $2,400, and expansion would require an annual fixed cost of $66,000 and a variable cost of $1,700 per boak. Expansion would result in an increase of $86,000 per year in transportation costs, subcontracting would result in an increase of $28,000 per year, and adding a new location would result in an increase of $4,800 per year. Which olternative would yleid the lowest total cost for an expected annual volume of 149 boats? A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the three locations given the following information. Annual costs for bullding. equipment, and administration would be $58,000 for Memphis, $68,000 for Biloxi, and $103,000 for Birmingham. Labor and materials are expected to be $6 per unit in Memphis, $5 per unit in Biloxi, and $5 per unit in Birmingham. The Mermphis location would increase system transportation costs by $57,000 per year, the Biloxi location by $67,500 per year, and the Birminghom location by $25,300 per year. Expected annual volume is 14,300 units