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Excel Products Is Planning a New Warehouse to Serve the Southeast

question 74

Multiple Choice

Excel Products is planning a new warehouse to serve the Southeast. Locations A, B, and C are under consideration. Fixed and variable costs follow:
$\begin{array} { | l | l | l | } \hline \text { Location } & \begin{array} { l } \text { Fixed Cost } \\\text { per Year }\end{array} & \begin{array} { l } \text { Variable Cost } \\\text { per Unit }\end{array} \\\hline \mathrm { A } & \$ 2,500,000 & \$ 19 \\\mathrm {~B} & 1,500,000 & 7 \\\mathrm { C } & 2,000,000 & 9 \\\hline\end{array}$
Plot the total cost curves in the chart provided below, and identify the range over which each location would be best. Then use break- even analysis as necessary to calculate exactly the break- even quantity that defines each range. $Excel Products is planning a new warehouse to serve the Southeast. Locations A, B, and C are under consideration. Fixed and variable costs follow: \begin{array} { | l | l | l | } \hline \text { Location } & \begin{array} { l } \text { Fixed Cost } \\ \text { per Year } \end{array} & \begin{array} { l } \text { Variable Cost } \\ \text { per Unit } \end{array} \\ \hline \mathrm { A } & \$ 2,500,000 & \$ 19 \\ \mathrm {~B} & 1,500,000 & 7 \\ \mathrm { C } & 2,000,000 & 9 \\ \hline \end{array} Plot the total cost curves in the chart provided below, and identify the range over which each location would be best. Then use break- even analysis as necessary to calculate exactly the break- even quantity that defines each range. Which of the following statements is correct? A) Location B is best over all volume levels. B) The total cost of location A, if the volume is 250,000 units, is over $7,000,000. C) Location A is the best one if volumes are quite high. D) The break- even quantity between A and B is more than 75,000 units but less than 200,000 units.$
Which of the following statements is correct?

Definitions:

FAB Presentation

A selling approach focusing on Features, Advantages, and Benefits of a product or service to persuade customers.

Referral

A recommendation from one person to another, directing someone towards a particular service, product, or professional.

Complimentary

Given free of charge, often as a courtesy or for promotional purposes.

Introductory

Pertaining to the beginning or initial phase of something, often used to describe the first exposure to a topic or the initial version of a product.