A Manufacturing Company Is Considering Two Alternative Locations for a New

question 49

Short Answer

A manufacturing company is considering two alternative locations for a new facility. The fixed and variable costs for the two locations are presented in the following table. For which volume of business would the two locations be equally attractive? If the company plans on producing 100,000 units, which location would be more attractive?
$$\begin{array} { | l | c | c | } \hline & \begin{array} { c } \text { Grand } \\\text { Rapid } \\s\end{array} & \text { Ann Arbor } \\\hline \text { Fixed costs } & \$ 2,000,000 & \$ 2,500,000 \\\hline \text { Variable costs (\$ per unit) } & 30 & 25 \\\hline\end{array}$$

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