A Manager Must Decide Between Two Location Alternatives, Boston and Chicago

question 42

Essay

A manager must decide between two location alternatives, Boston and Chicago. Boston would have annual fixed costs of $70,000, transportation costs of $60 per unit, and labor and material costs of $200 per unit. Chicago would have annual fixed costs of $90,000, transportation costs of $40 per unit, and labor and material costs of $170 per unit. Revenue will be $300 per unit.
(A) Which alternative would yield the higher profit for an annual demand of 3,000 units?
(B) Would the two locations yield the same profit at a certain volume? If so, at what volume would that be?

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Definitions:

Altered Protein

A protein that has undergone changes in its structure due to mutations, modifications, or environmental conditions, potentially affecting its function.

Replication

The process by which DNA makes a copy of itself during cell division.

Transcription

The process of copying a segment of DNA into RNA by the enzyme RNA polymerase, which is a crucial step in gene expression.

DNA Strand

A molecule that consists of a long chain of nucleotide units, each comprising a phosphate group, a sugar group, and a nitrogenous base, essential for storing genetic information.