A Manufacturing Firm Is Considering Two Locations for a Plant

question 78

Multiple Choice

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: $$\begin{array} { l r l } \text { Location } & \mathrm { FC } \text { (annual) } & \mathrm { VC } \text { (per unit) } \\\hline \text { Atlanta } & \$ 80,000 & \$ 20 \\\text { Phoenix } & \$ 140,000 & \$ 16\end{array}$$ If the annual demand will be 20,000 units, what would be the cost advantage of the better location?

• A) $20,000
• B) $460,000
• C) $480,000
• D) $80,000
• E) $60,000

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Definitions:

Empathy

The ability to understand and share the feelings of another, allowing for deeper connections and compassion towards others.

Feel

Experience or become aware of (an emotion or sensation).

Conformity

involves adjusting one's behavior or thinking to align with group norms or expectations, often due to real or imagined social pressure.

Obedience

The act of following orders or directives from authority figures, often studied in social psychology to understand the extent and limits of social influence.