A Small Producer of Music Boxes Wants to Move to a Larger

question 73

Essay

A small producer of music boxes wants to move to a larger facility.Two alternative facilities have been found.Site 1 has a fixed cost of $500,000 per year,with a variable cost of $25 per unit.Site 2 has a fixed cost of $800,000 per year,but a variable cost of $22 per unit.
a.Write out the equation for total cost for each site.
b.At what volume of output would the two locations have the same total cost?
c.For what range of output would Site 1 be superior?
d.For what range of output would Site 2 be superior?

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Definitions:

Ulcer Disease

Conditions caused by the development of ulcers in the stomach or small intestine, which can lead to symptoms like pain and bleeding.

Psychosocial Variables

Factors that encompass both psychological and social aspects, influencing individual behavior and well-being.

Psychosocial Variables

Factors that involve both psychological and social aspects affecting an individual's mental health and behavior.

Morbidity

The condition of being diseased or unhealthy within a population, often used to describe the rate of incidence of a disease.