The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown.
Site Fixed Cost per Year Variable Cost per Unit
1 $ 500 $ 11
2 $ 1,000 $ 7
3 $ 1,700 $ 4
A. Over what range of production is each location optimal?
B. For a production of 200 units, which site is best?
Solution shows optimal location for different range of production.