Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Hiro Nakamura is CEO of the Cola King Bottling Company a small regional producer operating in the Pacific Northwest. Nakamura is considering two alternative expansion proposals:
1. Construct a single bottling plant in Phoenix, Arizona with a capacity of 40,000 cases per month, at a monthly fixed cost of $20,000 and a variable cost of $2.50 per case.
2. Construct 3 plants, 1 each in Phoenix, Arizona; Las Vegas, Nevada; and Albuquerque, New Mexico, with capacities of 15,000, 14,000 and 13,000 respectively; and monthly fixed costs of $11,000, $10,000 and $9,000 each. Variable costs would be only $2.30 per case due to lower distribution costs, but sales from each plant would be limited to demand within the home state. The total estimated monthly sales volume in the southwestern states, 37,000 cases, is distributed as: Arizona, 15,000 cases; Nevada, 14,000 cases; and New Mexico, 8,000 cases.
A. Using a wholesale price of $4 per case in each state, find out the breakeven output quantities for each alternative.
B. Which alternative expansion scheme should Cola King follow?
C. If sales increase to production capacities, which alternative would prove to be more profitable?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M940149

Have any Question? 


Related Questions in Microeconomics

Cost-benefit analysisi measuring benefits from projects

Cost-Benefit Analysis I. Measuring Benefits From Projects That Reduce Private Good Costs Of Production (No distortions.)The inverse demand function for a good is given by: P = 30 -Q/3. Assume that the initial supply curv ...

Assignmentyou are hired at a manufacturing plant in texas

Assignment You are hired at a manufacturing plant in Texas as an assistant plant manager. You have over ten years of experience in manufacturing and have a Bachelors in Business and a Master in Business Administration. T ...

Evaluating the effectiveness of pre-positioning policies in

Evaluating the Effectiveness of Pre-Positioning Policies in Response to Natural Disasters EXPERIMENTAL DESIGN Objectives The intent of this research is to understand the impact of implementing a local pre-positioning str ...

Topic 1 costs and economies of scaleyou have learned a good

Topic 1: Costs and Economies of Scale You have learned a good deal about production costs and profit in this unit. You have also learned that accountants and economists calculate profit differently. Moreover, many suppli ...

Httpswwwyoutubecomwatchvkgsiduyw7wwhat was the promise of

https://www.youtube.com/watch?v=KGSID_Uyw7w What was the promise of capitalism? Discuss the important milestones and historical developments in economic theory and specify the contributions of each of the profits.

Microeconomics - cost elements of a businessassignmentin

Microeconomics - Cost Elements of a Business Assignment In this Assignment, you will define and calculate the remaining six major cost elements of a business, when given the Total Costs and the Quantity Produced, as well ...

Topic 1 perfectly competitive market structurea perfectly

Topic 1: Perfectly Competitive Market Structure A perfectly competitive market structure has key features. 1. There are many buyers and sellers so neither side of the market has market power. 2. The product provided to t ...

Assignmentthis final project paper will utilize many of the

Assignment This final project paper will utilize many of the sections of material you have studied during the duration of this course. You will make use of your own personal observations and occupational experiences to e ...

Principles of microeconomics assignmentquestion one the

PRINCIPLES OF MICROECONOMICS ASSIGNMENT Question One: The following table gives a total utility schedule for Michael who consumes sodas. The price of each can of soda is $50. a) Copy and complete the table. Number of can ...

Diagnostic assessmentsat its core a diagnostic assessment

Diagnostic Assessments "At its core, a diagnostic assessment is a detailed investigation of children's strengths and skill gaps that permits targeted intervention." (Howard, V. F., & Aiken, E., 2015, p. 282). Informal di ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate