Problem:
A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives. A (new location), B (subcontract), and C (expand existing facilities).
Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $300,000 per year, and variable costs would be $570 per boat. Subcontracting would involve a cost per boat of $2550, and expansion would require an annual fixed cost of $61,000 and a variable cost of $1,070 per boat.
a. Find the range of output for each alternative that would yield the lowest total cost. (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to the nearest whole number.)