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    Business Accounting/Operations Management

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    A firm is trying to decide between two location alternatives, Albany and Baltimore. Albany would result in annual fixed costs of $60,000, labor costs of $7 per unit, material costs of $10 per unit, transportation costs of $15 per unit, and revenue per unit of $50. Baltimore would have annual fixed costs of $80,000, labor costs of $6 per unit, material costs of $9 per unit, transportation costs of $14 per unit, and revenue per unit of $48.

    (A) At an annual volume of 9,000, which would yield the higher profit?
    ____________________________________
    (B) At what annual volume would management be indifferent between the two alternatives in terms of annual profits? __________________________

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    https://brainmass.com/business/business-management/business-accounting-operations-management-157094

    Solution Preview

    (A)

    Albany

    Variable cost = $32
    Revenue = $50
    CM per Unit = $18

    at 9000 units total CM = 18X9000 = ...

    Solution Summary

    The expert examines business accounting and operations management.

    $2.19

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