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Problem 8-4 (Algo) A company that produces pleasure boats has decided to expand one of its lines. Current facilities are

Posted: Fri Jul 01, 2022 9:00 am
by answerhappygod
Problem 8-4 (Algo) A company that produces pleasure boats hasdecided to expand one of its lines. Current facilities areinsufficient to handle the increased workload, so the company isconsidering three alternatives, A (new location), B (subcontract),and C (expand existing facilities). Alternative A would involvesubstantial fixed costs but relatively low variable costs: fixedcosts would be $260,000 per year, and variable costs would be $530per boat. Subcontracting would involve a cost per boat of $2,530,and expansion would require an annual fixed cost of $59,000 and avariable cost of $1,050 per boat.
a. Find the range of output for each alternative that wouldyield the lowest total cost. (Leave no cells blank - be certain toenter "0" wherever required. Round your answers to the nearestwhole number.)
b. Which alternative would yield the lowest total cost for anexpected annual volume of 160 boats? multiple choice A B C
C. What other factors might be considered in choosing betweenexpansion and subcontracting? (You may select more than one answer.Single click the box with the question mark to produce a check markfor a correct answer and double click the box with the questionmark to empty the box for a wrong answer. Any boxes left with aquestion mark will be automatically graded as incorrect.) check allthat apply
unanswered subcontracting costs will be known with greatercertainty
unanswered subcontracting provides a secondary (backup) sourceof supply
unanswered expansion offers more control over operations
unanswered expansion costs will be known with greatercertainty
unanswered subcontracting offers more control overoperations