The Budapest Company has identified four locations to set up a new production facility. They have determined the fixed and variable costs associated with each location as follows:

a. Plot the total cost curves for the three plant locations on a single graph.

b. Find the break-even points and determine the range of demand for which each location has a cost advantage. Which city has no cost advantage at all?

c. Which plant location is best if demand is i) 40,000 units, ii) 15,000?

Transcribed Image Text:

Annual Fixed Cost ($) Unit Variable Cost (S) Location Pittsburg Atlanta Miami 10,000 5 30,000 4 60,000 3 70,000 Houston 6.