Manufacturing firm is planning to open new factory

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A manufacturing firm is planning to open a new factory. There are four countries under consideration: USA, Canada, Mexico, and Panama. The table below lists the fixed costs and variable costs for each site. The product is mainly sold in the U.S. for $850 per unit. Location Fixed Cost Variable cost USA $400,000 $180 Mexico $100,000 $250 Canada $200,000 $200 Panama $ 60,000 $300 a- Find the range of production that makes each country optimal with lowest total cost. b- If the company forecasts that market demand will be around 5200 per year, what country is the best choice and what is the yearly profit?

Reference no: EM13901264

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