30) Ready-mix plants, A and B, with identical plants compete to supply a highway construction job that is ten miles from A and 20 miles from B. Each sells ready-mix fob plant (loaded at the plant) at LRMC equals $25 a ton, and the cost of transporting ready-mix is $2 per ton-mile. Each delivery weighs 5 tons. Which plant, A or B, obtains the business and what is its profit? A) A gets the business and earns $0 profit. B) B gets the business and earns $0 profit. C) B gets the business and earns profit $100. D) A gets the business and earns profit $100.

30) Ready-mix plants, A and B, with identical plants compete to supply a highway construction job that is ten miles from A and 20 miles from B. Each sells ready-mix fob plant (loaded at the plant) at LRMC equals $25 a ton, and the cost of transporting ready-mix is $2 per ton-mile. Each delivery weighs 5 tons. Which plant, A or B, obtains the business and what is its profit? A) A gets the business and earns $0 profit. B) B gets the business and earns $0 profit. C) B gets the business and earns profit $100. D) A gets the business and earns profit $100.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11E

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