Location Fixed Costs Variable Costs A $70,000 $1/unit B $34,000 $5/unit C $20,000 $8/unit $50,000 $4/unit

Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Shoeless Joe is a specialty retailer that is deciding where to
locate a new facility. Th e annual fi xed and variable costs for each
possible site have been estimated as follows:

If demand is expected to be 2000 units, which location is best?

Location
Fixed Costs
Variable Costs
A
$70,000
$1/unit
B
$34,000
$5/unit
C
$20,000
$8/unit
$50,000
$4/unit
Transcribed Image Text:Location Fixed Costs Variable Costs A $70,000 $1/unit B $34,000 $5/unit C $20,000 $8/unit $50,000 $4/unit
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