A Manufacturing Company Preparing to Build a New Plant Is

Essay

A manufacturing company preparing to build a new plant is considering three potential locations for it. The fixed and variable costs for the three alternative locations are presented below.
a. Complete a numeric locational cost-volume analysis.
b. Indicate over what range each of the alternatives A, B, C is the low-cost choice.
c. Is any alternative never preferred? Explain.
$$\begin{array} { | l | l | l | l | } \hline \text { Costs } & \text { A } & \text { B } & \text { C } \\\hline \text { Fixed } ( \$ ) & 2,800,000 & 2,000,000 & 3,500,000 \\\hline \text { Variable (\$ per unit) } & 21 & 25 & 15 \\\hline\end{array}$$