Homework Help is Here – Start Your Trial Now!
Business
Operations Management
Fall-Line, Inc., is a Great​ Falls, Montana, manufacturer of a variety of downhill skis.​ Fall-Line is considering four locations for a new​ plant: Aspen,​ Colorado; Medicine​ Lodge, Kansas; Broken​ Bow, Nebraska; and Wounded​ Knee, South Dakota. Although​ Aspen's fixed and variable costs are dominated by those of the other​ communities, Fall-Line believes that both the demand and the price would be higher for skis made in Aspen than for skis made in the other locations. The following table shows those projections along with the annual fixed costs and variable costs per pair of skis for each​ location: a.  What​ break-even quantity defines each​ location? b.  What break-even quantity defines each range? c.  Determine which location yields the highest total profit per year.

Fall-Line, Inc., is a Great​ Falls, Montana, manufacturer of a variety of downhill skis.​ Fall-Line is considering four locations for a new​ plant: Aspen,​ Colorado; Medicine​ Lodge, Kansas; Broken​ Bow, Nebraska; and Wounded​ Knee, South Dakota. Although​ Aspen's fixed and variable costs are dominated by those of the other​ communities, Fall-Line believes that both the demand and the price would be higher for skis made in Aspen than for skis made in the other locations. The following table shows those projections along with the annual fixed costs and variable costs per pair of skis for each​ location: a.  What​ break-even quantity defines each​ location? b.  What break-even quantity defines each range? c.  Determine which location yields the highest total profit per year.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
See similar textbooks
icon
Related questions
Question

​Fall-Line, Inc., is a Great​ Falls, Montana, manufacturer of a variety of downhill skis.​ Fall-Line is considering four locations for a new​ plant: Aspen,​ Colorado; Medicine​ Lodge, Kansas; Broken​ Bow, Nebraska; and Wounded​ Knee, South Dakota. Although​ Aspen's fixed and variable costs are dominated by those of the other​ communities, Fall-Line believes that both the demand and the price would be higher for skis made in Aspen than for skis made in the other locations. The following table shows those projections along with the annual fixed costs and variable costs per pair of skis for each​ location:

a.  What​ break-even quantity defines each​ location?

b.  What break-even quantity defines each range?

c.  Determine which location yields the highest total profit per year.

d.  

Annual Fixed Variable Cost Forecast Demand Location Costs per Pair Price per Pair per Year Aspen $7,750,000 $175 $415 51,250 pairs Medicine Lodge $2,850,000 $120 $325 45,750 pairs Broken Bow $3,455,000 $82 $355 42,950 pairs 37,500 pairs Wounded Knee $4,600,000 $64 $335
Transcribed Image Text:Annual Fixed Variable Cost Forecast Demand Location Costs per Pair Price per Pair per Year Aspen $7,750,000 $175 $415 51,250 pairs Medicine Lodge $2,850,000 $120 $325 45,750 pairs Broken Bow $3,455,000 $82 $355 42,950 pairs 37,500 pairs Wounded Knee $4,600,000 $64 $335
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS