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jgosset2 jgosset2
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7 years ago
A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives, A (new location), B (subcontract), and C (expand existing facilities).
       Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $265,000 per year, and variable costs would be $590 per boat. Subcontracting would involve a cost per boat of $2,560, and expansion would require an annual fixed cost of $51,000 and a variable cost of $1,070 per boat.

 
a. Find the range of output for each alternative that would yield the lowest total cost. (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to the nearest whole number.)

A _____ or more
B _____ to _____      
C _____ to _____      

 
b. Which alternative would yield the lowest total cost for an expected annual volume of 140 boats?
 A, B, or C?   
    
   
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bio_manbio_man
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#1
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7 years ago
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jgosset2 Author
wrote...
#2
7 years ago
Thank you for taking the time to explain it. I'm taking an online course and I'm struggling to teach myself how to do these problems using the course textbook. Step by step solutions really help me with understanding the concepts. 
jgosset2 Author
wrote...
#3
7 years ago
Why did you put a 1 (i.e 1 to 39) where there should have been a 0?
jgosset2 Author
wrote...
#4
7 years ago
But thanks with the rest!
wrote...
#5
4 years ago
THANK YOU
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#6
4 years ago
Thank you
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#7
4 years ago
Thanks
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#8
4 years ago
Thank you
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#9
4 years ago
Thank you
wrote...
#10
4 years ago
thank you
wrote...
#11
3 years ago
Thanks
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#12
3 years ago
Best
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