Question
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:
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:
Location
FC (annual)
VC (per unit)
Atlanta
$
80,000
$
20
Phoenix
$
140,000
$
16
If the annual demand will be 20,000 units,what would be the cost advantage of the better location? HINT: Compare the total costs
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Managerial Accounting Tools For Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
2nd Canadian Edition
0471413658, 978-0471413653
