Problem 8 4 Algo A Company That Produces Pleasure Boats Has Decided To Expand One Of Its Lines Current Facilities Are 1 (38.62 KiB) Viewed 89 times
Problem 8 4 Algo A Company That Produces Pleasure Boats Has Decided To Expand One Of Its Lines Current Facilities Are 2 (24.45 KiB) Viewed 89 times
Problem 8-4 (Algo) A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insuffi ncreased workload, so the company is considering three alternatives, A (new location), B (subcontract), and facilities). Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $30 variable costs would be $520 per boat. Subcontracting would involve a cost per boat of $2,530, and expans annual fixed cost of $60,000 and a variable cost of $1,050 per boat. a. Find the range of output for each alternative that would yield the lowest total cost. (Leave no cells blank - I wherever required. Round your answers to the nearest whole number.) A B C or to to more
es b. Which alternative would yield the lowest total cost for an expected annual volume of 250 boats? A B OC C. What other factors might be considered in choosing between expansion and subcontracting? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 7 subcontracting costs will be known with greater certainty subcontracting provides a secondary (backup) source of supply expansion offers more control over operations 7 expansion costs will be known with greater certainty ? subcontracting offers more control over operations
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