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A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in


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A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the three locations given the following information: Annual costs for building, equipment, and administration would be $38,600 for Memphis, $60,000 for Biloxi, and $100,000 for Birmingham. Labor and materials are expected to be $8 per unit in Memphis, $4 per unit in Biloxi, and $5 per unit in Birmingham. The Memphis location would increase system transportation costs by $50,000 per year, the Biloxi location by $60,000 per year, and the Birmingham location by $27,400 per year. Expected annual volume is 14,800 units.(Omit the "$" sign in your response.)
Particulars

 

Annual Volume

 

Labor & Material Cost per unit

 

Total Labor & Material Cost

 

Annual costs for building, equipment,

 

and administration Memphis

 

14800

 

$8

 

$118,400 System transportation...

 


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