FloorsRUs is considering new locations for its manufacturing plants. Costs for constructing a new facility in Huntsville are $1,100,000 and the company estimates that for every product from its new line, there would be an additional cost of $3. If the company were to locate in Hays, the new facility would cost $1,800,000 and each product would incur a $2 incremental cost. The company plans to sell the products to retailers for $7. At what volume is the point of indifference?At what forecasted volumes should FloorsRUs select Huntsville as their new manufacturing location and what volumes should the company select Hays and why?

Following information is given: Huntsville Hays Fixed cost 1100000 1800000 Variable cost 3…

Answered: At what volume is the point of…

At what volume is the point of indifference? At what forecasted volumes should FloorsRUs select Huntsville as their new manufacturing location and what volumes should the company select Hays and why?

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.2SB

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