Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: 'Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs of $14,000 per standard unit produced. McKinney would have annual fixed costs of $960,000 and variable costs of $13,000 per standard unit. The finished items sell for $30,000 each. a) The volume of output at which both the locations have the same profit= standard units (round your response to the nearest whole number).

Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: 'Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs of $14,000 per standard unit produced. McKinney would have annual fixed costs of $960,000 and variable costs of $13,000 per standard unit. The finished items sell for $30,000 each. a) The volume of output at which both the locations have the same profit= standard units (round your response to the nearest whole number).

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Peggy Lane Corp., a producer of machine tools,wants to move to a larger site. Two alternative locations havebeen identified: Bonham and McKinney. Bonham would havefixed costs of $800,000 per year and variable costs of $14,000per standard unit produced. McKinney would have annual fixedcosts of $920,000 and variable costs of $13,000 per standard unit.The finished items sell for $29,000 each.a) At what volume of output would the two locations have thesame profit?b) For what range of output would Bonham be superior (havehigher profits)?c) For what range would McKinney be superior?d) What is the relevance of break-even points for thesecities?
Peggy Lane Corp., a producer of machine tools, wants to move to a larger site. Two alternative locations have been identified: Bonham and McKinney Bonham would have fixed costs of $780,000 per year and variable costs of $15,000 per standard unit produced McKinney would have annual fixed costs of $920,000 and variable costs of $13,800 per standard unit. The finished items sell for $30,000 each. a) The volume of output at which both the locations have the same profit = standard units (round your response to the nearest whole number). b) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, Bonham is superior below c) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, McKinney is superior above d) The break-even point for Bonham is The break-even point for McKinney is units. (Enter your response rounded to the nearest whole number) units. (Enter your response rounded to the nearest whole number) standard…
Peggy Lane Corp., a producer of machine tools, wants tomove to a larger site. Two alternative locations have been identified: Bonham and McKinney. Bonham would have fixed costs of $800,000 per year and variable costs of $14,000 per standard unit produced. McKinney would have annual fixed costs of $920,000 and variable costs of $13,000 per standard unit. The finished items sell for $29,000 each. a) At what volume of output would the two locations have the same profit?b) For what range of output would Bonham be superior (have higher profits)?c) For what range would McKinney be superior?d) What is the relevance of break-even poi nts for these cities?
Location Fixed Cost Variable Cost A $100,000 $10 B $150,000 $7 C $200,000 $5 600 Annual 500 Cost ($000) 400 300 200 100 2 4 6 8 10 14 16 18 20 Q (000s of units) i. Plot the total cost curves in the chart provided above and identify the range over which each location would be best. ii. Use break-even analysis to calculate exactly the break-even quantity that defines each range.
Problem 8-10 Factor Initial cost Traffic Maintenance Dock space Neighborhood Location East #1 East #2 West Weight East #1 100 60 20 24 15 0 00 00 N West East #1 East #2 8 8 4 4 2 East #2 110 35 25 24 9 a. Using the above factor ratings, calculate the composite score for each location. West 110 35 Composite Score 25 13 11 b. Determine which location has the highest composite score:
10.determine which location has the highest composite score.
What are the three steps to locational cost–volume analysis?
PetSmart and PetCo are two major competitors offering pet supplies and pet food. Given the location decisions of PetSmart and PetCo in this city, you conclude that: a. PetSmart focuses on raising its quantity sold rather than raising its profit margin on each unit. b. PetSmart and Petco engage in intense price undercutting. c. PetSmart and PetCo differentiate themselves by location. d. PetCo chose its location primarily using demand side considerations.
Q) A discount store chain wants to build a new superstore in an area in Melbourne near four small towns with populations between 10,000 and 40,000. The coordinates (in miles) of these four towns and the market population in each are as follows: Coordinates Carlton St Kilda Ballarat Frankston 12 18 30 32 20 12 8 25 Population 18,000 17,000 10,300 10,000 a) Determine the best site using the center-of-gravity technique. b) Suppose the store is limited to two possible sites for locating a new superstore. The coordinates (in miles) of these two potential sites are site 1 (10, 30) and site 2 (20, 10). Using the load-distance technique, determine the best site for the new super store. c) Plot the four small towns and the proposed new distribution centers according to center of gravity method and load-distance method on a grid map. Give your own opinion about it.
Peter Billington Stereo, Inc., supplies car radios to auto manufacturers a nd is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lower due to cheaper land costs, but the variable costs in Dallas are higher because shipping distances would increase. Given the following costs: a) Perform an analysis of the volume over which each location is preferable.b) How does your answer change if Dallas's fixed costs increase by 10%?
Sap Manufacturing, a manufacturing company that manufactures football jerseys and located in Port Antonio, Jamaica, is preparing to build a new plant. J’s is considering three potential locations that are suitable for the construction of the plant. The fixed and variable costs for the three alternative locations are presented in the table below. Costs A B C Fixed Costs ($) 700,000 1,000,000 1,100,000 Variable ($ per unit) 28 20 18 Identify the range over which each alternative (A, B and C) is best. A manufacturing firm is considering three potential locations for a new parts manufacturing facility. A consulting firm has assessed three sites based on the four factors supplied by management as critical to the location's success. The factor weights and the consultant team scores are given in table 5 below. Scores are based on 50 = best. Locations Factors Weights A B C Labor Climate 10 35 45 20 Taxes 30 30 40 40 Utilities 20 25 20…
4. A local manufacturer of Barbadian-branded pens has chosen a site for herbusiness which will have fixed costs of $9,200 per month and variable costs of$2 per unit produced. Each item is sold to retailers at a price that averages$2.20.a. What volume per month is required in order to break even?b. What profit would be realised on a monthly volume of 87,000 units?c. What volume is needed to reach a profit target of $16,000 per month?