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QUESTION
A small producer of machine tools wants to move to a larger building, and has identified two alternatives.
A small producer of machine tools wants to move to a larger building, and has identified two alternatives. Location A has annual fixed costs of $160,000 and variable costs of $15,000 per unit; location B has annual fixed costs of $360,000 and variable costs of $14,000 per unit. The finished items sell for $16,000 each.
