A Manager Must Decide Between Two Location Alternatives,Montreal and Toronto

question 62

Essay

A manager must decide between two location alternatives,Montreal and Toronto.Montreal would have annual fixed costs of $80,000,transportation costs of $80 per unit,and labour and material costs of $70 per unit.Toronto would have annual fixed costs of $150,000,transportation costs of $20 per unit,and labour and material costs of $80 per unit.Revenue will be $250 per unit.
(i)Which alternative would yield the higher profit for an annual demand of 2,000 units?
(ii)At what volume (quantity)would the manager be indifferent in terms of which of the two locations were chosen? What would the profit be at that volume?
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Definitions:

Equality of Opportunity

The principle that all individuals should have the same chances to succeed in life, regardless of their backgrounds or starting positions.

Military Intervention

The act of a nation deploying its armed forces to another territory with the aim of achieving specific political objectives, which can range from humanitarian aid to direct military control.

Conservatism

A political and social philosophy promoting traditional institutions, practices, and customs, advocating for minimal government intervention in society.

Political Self-Description

How individuals or groups identify and articulate their political beliefs, affiliations, and ideologies.