As a head of the planning commission of midwest motors, your job is to determine where to locate a new plant. y
ou have access to the constant returns to scale technology y = s 1/2l 1/2 , where s is tons of steel and l is units of labor.
you can locate your plant either in country a or country b.
in country a, steel costs $7 a ton and labor costs $7 per unit.
in country b, steel costs $8 per ton and labor costs $6 per unit.

in which country should the company locate its new plant so as to minimize costs per unit of output?

Ultravision inc. anticipates sales of $280,000 from january through april. materials will represent 50 percent of sales, and because of level production, material purchases will be equal for each month during the four months of january, february, march, and april. materials are paid for one month after the month purchased. materials purchased in december of last year were $24,000 (half of $48,000 in sales). labor costs for each of the four months are slightly different due to a provision in the labor contract in which bonuses are paid in february and april. the labor figures are: january $14,000 february 17,000 march 14,000 april 19,000 fixed overhead is $10,000 per month. prepare a schedule of cash payments for january through april. (assume the $280,000 of sales occur equally over the four months of january through april, i.e. monthly sales = $280,000 / 4.)