Which location would minimize the total costs

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Reference no: EM1386963

The following data are related to the operating costs of three possible locations for Fountains Manufacturing:

Location 1 Location 2 Location 3
Fixed Costs $165,000 $125,000 $180,000
Direct material cost per unit 8.5 8.4 8.6
Direct labor cost per unit 4.2 3.9 3.7
Overhead per unit 1.1 1.1 1.0
Transportation costs per 1,000 units 800 1,100 950

Which location would minimize the total costs, given an annual productoi of 50,000 units? For what levels of manufacture and distribution would each location be best?

Reference no: EM1386963

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