Answer:
C alternative would yield the lowest total cost for an expected annual volume of 111 boats
Explanation:
The computation of each alternatives are shown below:
A (new location)
Fixed cost $310,000
Variable cost ($400 × 111 boats) $44,400
Transportation cost $5,300
Total cost $359,700
B (subcontract)
Fixed cost $0
Variable cost ($3,200 × 111 boats)$355,200
Transportation cost $32,000
Total cost $387,200
C (expand existing facilities)
Fixed cost $74,000
Variable cost ($1,200 × 111 boats) $133,200
Transportation cost $88,000
Total cost $295,200
Out of these, the alternative C has the lowest total cost
