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Fixed Cost & Variable Cost & Demand Problem

How to calculate demand requirements for Alternative B. See attached file for full problem description.

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Solution Preview

Please see the attached file.

Part a:
For plan A: Total variable cost per day = total demand per day (yd3)*variable cost per yd3
= (20000 + 7000 + 6000)*$1.5 = $49,500
Fixed cost per day = $20,000
Total cost for plan A per day = 49500 + 20000 = $69,500

For plan B: Total variable cost per day = demand at site 1*variable cost for site 1 + demand at site 2*variable cost for site 2 + demand at site 3*variable cost for site 3 ...

Solution Summary

Solution contains calculations of Fixed Cost , Variable Cost and Demand.

$2.19