Fall-Line Inc. is a Great Falls Montana manufacturer of a variety of downhill sk

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    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. Annual fixed costs and variable costs per pair of skis are shown in the attached table.a. Plot the total cost curves for all of the communities on a single graph. Identify on the graph the range in volume over which each location would be best.b. What break-even quantity defines each range?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 attached table also shows those projections. c. Determine which location yields the highest total profit per year.d. Is this location decision sensitive to forecast accuracy? At what minimum sales volume does Aspen become the location of choice?
    8000000
    2502400000
    1303400000
    904500000
    65500350350350Location
    Annual Fixed Costs
    Variable Cost per Pair
    Aspen
    Medicine Lodge
    Broken Bow
    Wounded Knee
    Price per Pair
    Forecast Demand per Year
    60000 pairs
    45000 pairs
    43000 pairs
    40000 pairs

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