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Submitted by Clay1203 on Thu, 2012-05-17 21:38
due on Sat, 2012-05-19 19:59
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# Evaluate 7.2 Problem 3

Two alternative locations are under consideration for a new plant: Jackson, Mississippi and Dayton, Ohio. The Jackson location is superior in terms of costs. However, management believes that sales volume would decline if this location were chosen because it is farther from the market, and the firm’s customers prefer local supplies. The selling price of the product is \$250 per unit in either case. Use the information in the table attached to determine which location yields the higher total profit per year.

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Submitted by RSaleem on Sun, 2014-05-18 22:13
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## Perfect Solution

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Two alternative locations are under xxxxxxxxxxxxx for a xxx xxxxxx Jackson, Mississippi, xxx Dayton, Ohio.The xxxxxxx xxxxxxxx xx superior in terms of costs. However, xxxxxxxxxx xxxxxxxx that xxxxx xxxxxx would xxxxxxx if xxxx location xxxx chosen because xx is xxxxxxx from xxx xxxxxxx xxx xxx xxxx’s xxxxxxxxx xxxxxx local suppliers. The xxxxxxx price of the product xx \$250 xxx unit xx either xxxxx Use xxx xxxxxxxxx infor- mation to xxxxxxxxx which xxxxxxxx xxxxxx the xxxxxx total xxxxxx per year:

Price xx xxxx xxx xxxxxxxx x xxxx

xxxxx xxxxxx xx xxxxxxxx

Forecasted xxxxxx xxx x xxxxx

xxxxx cost xxx forecasted xxxxx = xxxxx xxxx xxxxxx variable cost = xxxxxxxxxxxxxxxx x xxxxxxxx

xxxxx revenue = xxxxxxxxxxxxxxxx sale=250*30000 = \$7500000

Thus total xxxxxx xx Jackson x xxxxx revenue-total cost x xxxxxxxxxxxxxxxx xxxxxxxx

xxxxx profit in xxxxxxx

xxxxxxxxxx sale (x) = 40000

xxxxx xxxx xxx xxxxxxxxxx sale) = fixed cost+ xxxxx variable cost= 2800000+85*40000 = \$6200000

xxxxx xxxxxxx x xxxxxxxxxxxxxxxx xxxx x 250*40000 x \$10000000

xxxx xxxxx profit xx xxxxxx = xxxxx revenue –total xxxx = xxxxxxxxxxxxxxxx = xxxxxxxx

xx note that xxxxxxx xxxxxx xxxxxx profit xxx year.

Submitted by Kumail Raza on Fri, 2012-05-18 08:46
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## Answer file is attached. Please feel free to contact may you need any help. Thanks

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# xxxx

xxxxxxxxxxx
 Annual Variable Forecast Location Fixed xxxx Cost xxx Unit xxxxxx xxx Year Jackson xxxxxxxxxx \$50 30,000 units xxxxxx \$2,800,000 xxx 40,000 xxxxx

xxxxxxx
 Jackson or Dayton locations Jackson — xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx = \$4,500,000 Dayton — \$250x(40,000)-[\$2,800,000+(\$85x40,000)]=\$10,000,000-\$6,200,000 x \$3,800,000 Jackson xxxxxx xxxxxx xxxxx xxxxxx contribution per year

# Sheet3

Submitted by shahimermaid on Thu, 2012-05-17 23:04
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## the answer is explained in the simplest way and is solved in excel file

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xxxxxxx xxxxxxxx xx superior xx xxxxx of xxxxxx and xxxx profit

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# Sheet1

xxxxxxxxxx
 xxxxxx Variable Forecast xxx TC TS xxxxxx xxxxxxxx Fixed Cost xxxx per xxxx xxxxxx per Year xxxxxxx \$1,500,000 \$50 xxxxxx units xxxxxxxxxx \$3,000,000 7500000 xxxxxxxxxx Dayton \$2,800,000 xxx 40,000 xxxxx xxxxxxxxxx \$6,200,000 xxxxxxxx xxxxxxxxxx xxxxxxx xx more xxxxxxxxxx

# Sheet3

Submitted by SHIR15 on Thu, 2012-05-17 22:47
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## explained in details...

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xxxxxxxxxxxxxx Cost Cost per xxxxxxxxxxx xxx Year

Jackson \$1,500,000 xxxx 30,000 xxxxx

Dayton \$2,800,000 xxxx 40,000 units

xxxxxxx

PRODUCTION xxxxxxxxxxxxx

=\$1,500,000

xxxxxxxxxxxx

xxxxxxxxxxxx

xxxxxxxxxxx

Profit= xxxxx

TC=PC+FC

TC= xxxxxxxxxxxxxxxxx

=7500000-3000000

P= x xxxxxxxxx

DAYTON

PRODUCTION xxxxx xxxxxxxx

xxxxxxxxxxx

xxx xxxxxxxxx

=\$10,000,000

FC=\$ 2,800,000

PROFIT=SC-TC

xxxxxxxx

xxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxx

PROFIT=10,000,000-6,200,000

PROFIT=\$3,800,000

xxxxxxxxxxx xxxxxxxx xxxxxxxxx

DAYTON’S xxxxxxxx 3,800,000

xxxxxxxxxx xxxxxxxxxxx xxxxxxxx xxxxx xxx xxxxxxx profit of \$ xxxxxxxxx