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Kayla is considering opening a new foundry in Denton, TX; Edwardsville, IL; or Fayetteville, AR to produce high-quality rifle sights. He has assembled the following
Kayla is considering opening a new foundry in Denton, TX; Edwardsville, IL; or Fayetteville, AR to produce high-quality rifle sights. He has assembled the following fixed-cost and variable-cost data:
- Graph the total cost lines.
- Over what range of annual volume is each facility going to have a competitive advantage?
- What is the volume at the intersection of the Edwardsville and Fayetteville cost lines?
\begin{tabular}{|l|l|l|l|l|} \hline \multirow{2}{*}{ Location } & \multirow{2}{*}{Fixedcostperyear} & \multicolumn{3}{|c|}{ Per-unit costs } \\ \cline { 3 - 5 } & & Material & Variable labor & Overhead \\ \hline Denton & $200,000 & $.20 & $.40 & $.40 \\ \hline Edwardsville & $180,000 & $.25 & $.75 & $.75 \\ \hline Fayetteville & $170,000 & $1.00 & $1.00 & $1.00 \\ \hline \end{tabular}
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