The Owner of a Millwork Shop Is Considering Three Alternative

Essay

The owner of a millwork shop is considering three alternative locations for a new plant for building embossed-and-clad steel exterior doors for residences. Fixed and variable costs follow. Since the plant ships nationwide, revenue is assumed the same regardless of plant location. Plot the total cost lines in the chart provided below, and identify the range over which each location is best.
$$\begin{array} { | l | c | c | c | } \hline & { \text { Location } } \\\hline \text { Costs } & \mathrm { A } & \mathrm { B } & \mathrm { C } \\\hline \text { Fixed } & \$ 700,000 & \$ 1,000,000 & \$ 1,1000,000 \\\hline \text { Variable } & \$ 28 & \$ 18 & \$ 20 \\\hline\end{array}$$