"Fall-Line, Inc., is a Great Falls, Montana, manufacturer of a variety of downhill skis. Fall-Line is consider- ing 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 following table: Location Annual Fixed Costs Variable Cost per Pair Aspen $8,000,000 $250 Medicine Lodge $2,400,000 $130 Broken Bow $3,400,000 $90 Wounded Knee $4,500,000 $65
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 loca- tions. The following table shows those projections:
Determine which location yields the highest total profit per year.