not certain how to calculate because it says each item sells for 17,000. also, I wouldnt be sure which numbers to graph with
1. A small producer of machine tools wants to move to a larger building, and has identified two
alternatives. Location A has annual fixed costs of $800,000 and variable costs of $14,000 per
unit; location B has annual fixed costs of $920,000 and variable costs of $13,000 per unit1
The finished items sell for $17,000 each.
A) State the total-cost formula:
B) Calculate a second point for each location: Set a selected quantity = ____ Use q=150 units
C) Sketch the total-cost lines for the locations on a single graph.
Location A has annual fixed cost =$800,000
Variable cost=$14000per unit
Location B has annual fxed cost=$$920,000
Variable cost=$13000 per unit
Finshied iteams sells for $17000
a)State the total cost formula
|Annual fixed costs||$800000||$920000|
|Annual variable costs||$14000perunit||$13000perunit|
Finished items sell for $17000
Then the formula for total cost=Total fixed cost+Total variasble cost
For Location A the total cost=$800000+$14000
For Location B the total cost=$920000+$13000
b)Calculate a second point for each location and set a selected quantity by using q=150units
For location A:
For location B:
Here the cross over point would be get by comparing the ...
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