A Manufacturing Company Preparing to Build a New Plant Is

question 72

Essay

A manufacturing company preparing to build a new plant is considering three potential locations for it. The fixed and variable costs for the three alternative locations are presented below.
a. Complete a numeric locational cost-volume analysis.
b. Indicate over what range each of the alternatives A, B, C is the low-cost choice.
c. Is any alternative never preferred?
Explain.
$$\begin{array} {| l | c | c | c | } \hline \text { Costs } & \text { A } & \text { B } & \text { C } \\\hline \text { Fixed (\$) } & 2,500,000 & 2,000,000 & 3,500,000 \\\hline \text { Variable (\$ per unit) } & 21 & 25 & 15 \\\hline\end{array}$$

---

Definitions:

Domestic Producers

Domestic producers are individuals or companies that manufacture goods or provide services within a country's borders, contributing to its domestic economy.

Domestic Consumers

Domestic consumers refer to individuals or entities within a country that purchase goods or services for personal use.

Free Trade

The exchange of goods and services between nations without restrictive regulations such as tariffs, duties, or quotas, intended to create more efficient markets.

International Trade

The exchange of goods, services, and capital across international borders or territories.