A Manufacturing Company Is Considering Two Alternative Locations for a New

question 113

Essay

A manufacturing company is considering two alternative locations for a new facility. The fixed and variable costs for the two locations are found in the table below. For which volume of business would the two locations be equally attractive? If the company plans on producing 50,000 units, which location would be more attractive?
$$\begin{array} { | l | l | l | } \hline & \text { Glen Rose } & \text { Mesquite } \\\hline \text { Fixed Costs } & \$ 1,000,000 & \$ 1,500,000 \\\hline \text { Variable Costs (\$per unit) } & 25 & 23 \\\hline\end{array}$$