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Submitted by Clay1203 on Thu, 2012-05-17 21:38
due on Sat, 2012-05-19 19:59
answered 4 time(s)
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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.

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.

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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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file1.2_problem_3_answer.xlsx preview (48 words)


Location Fixed xxxx Cost xxx Unitxxxxxx xxx Year
Jackson xxxxxxxxxx$5030,000 units
xxxxxx$2,800,000xxx40,000 xxxxx


Jackson or Dayton locations
Jackson —
 Dayton —
 Jackson xxxxxx xxxxxx xxxxx xxxxxx contribution per year


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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

file1.2_problem_3_data_set.xlsx preview (27 words)


xxxxxx Variable Forecastxxx TC TSxxxxxx
xxxxxxxx Fixed Costxxxx per xxxxxxxxxx per Year
xxxxxxx$1,500,000$50 xxxxxx unitsxxxxxxxxxx $3,000,000 7500000 xxxxxxxxxx
Dayton $2,800,000 xxx 40,000 xxxxx xxxxxxxxxx$6,200,000 xxxxxxxx xxxxxxxxxx
xxxxxxx xx more xxxxxxxxxx



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