A Firm Is Trying to Decide Between Two Location Alternatives,A

Essay

A firm is trying to decide between two location alternatives,A and B.A would result in annual fixed costs of $60,000,labour costs of $7 per unit,material costs of $10 per unit,transportation costs of $15 per unit,and revenue per unit of $50.Location B would have annual fixed costs of $80,000,labour costs of $6 per unit,material costs of $9 per unit,transportation costs of $14 per unit,and revenue per unit of $48.
(i)At an annual volume of 9,000,which would yield the higher profit?
(ii)At what annual volume would management be indifferent between the two alternatives in terms of annual profits?