{"id":157961,"date":"2023-09-08T11:32:58","date_gmt":"2023-09-08T06:02:58","guid":{"rendered":"https:\/\/www.gkseries.com\/blog\/?p=157961"},"modified":"2023-09-08T11:32:58","modified_gmt":"2023-09-08T06:02:58","slug":"a-firm-with-a-production-target-of-50000-units-year-has-the-following-data-for-the-selection-of-a-new-location-for-its-plant","status":"publish","type":"post","link":"https:\/\/www.gkseries.com\/blog\/a-firm-with-a-production-target-of-50000-units-year-has-the-following-data-for-the-selection-of-a-new-location-for-its-plant\/","title":{"rendered":"A firm, with a production target of 50,000 units\/year has the following data for the selection of a new location for its plant"},"content":{"rendered":"\n

Q. A firm, with a production target of 50,000 units\/year, has the following data for the selection of a new location for its plant<\/p>\n\n\n\n

Location<\/strong><\/td>Fixed cost (Rs.)<\/strong><\/td>Variable costs per unit (Rs.)<\/strong><\/td><\/tr>
P<\/td>110,000<\/td>2<\/td><\/tr>
Q<\/td>95,000<\/td>2.5<\/td><\/tr>
R<\/td>80,000<\/td>3<\/td><\/tr>
S<\/td>75,000<\/td>3.5<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The most economical location for the firm is<\/p>\n\n\n\n

(A) P\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 (B) Q\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 (C) R\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 (D) S<\/p>\n\n\n\n

Ans: P<\/p>\n\n\n\n

Sol:<\/p>\n\n\n\n

Concept: <\/p>\n\n\n\n

Total Cost = Fixed cost +\u00a0Quantity \u00d7 Variable cost <\/p>\n\n\n\n

T = F + q \u00d7 V <\/p>\n\n\n\n

Calculation:<\/p>\n\n\n\n

Given:<\/p>\n\n\n\n

Quantity, q = 50,000 units\/year <\/p>\n\n\n\n

TP = F1 + q \u00d7 V1 = 110,000 + 2 \u00d7 50,000 = 2, 10, 000\/- <\/p>\n\n\n\n

TQ\u00a0= F2+ q \u00d7 V2= 95,000 + 2.5 \u00d7 50,000 = 2, 20,000\/- <\/p>\n\n\n\n

TR = F3 + q \u00d7 V3 = 80,000 + 3 \u00d7\u00a0 50,000 = 2, 30, 000\/- <\/p>\n\n\n\n

TS = F4 + q \u00d7 V4 = 75,000 + 3.5 \u00d7 50,000 = 2, 50, 000\/- <\/p>\n\n\n\n

\u2234 Total cost would be minimum for firm P. Hence, firm P will be most economical.<\/p>\n","protected":false},"excerpt":{"rendered":"

Q. A firm, with a production target of 50,000 units\/year, has the following data for the selection of a new location for its plant Location Fixed cost (Rs.) Variable costs per unit (Rs.) P 110,000 2 Q 95,000 2.5 R 80,000 3 S 75,000 3.5 The most economical location for the firm is (A) P\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 […]<\/p>\n","protected":false},"author":419,"featured_media":157971,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[5141],"tags":[5140],"class_list":["post-157961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gate","tag-gate-questions"],"_links":{"self":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/157961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/users\/419"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/comments?post=157961"}],"version-history":[{"count":1,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/157961\/revisions"}],"predecessor-version":[{"id":157972,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/157961\/revisions\/157972"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/media\/157971"}],"wp:attachment":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/media?parent=157961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/categories?post=157961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/tags?post=157961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}