customer service offices located in each country. PGI’s operating headquarters is located in Austin, Texas, where company management is located as well as a significant portion of the computer...

customer service offices located in each country. PGI’s operating headquarters is located in Austin, Texas, where company management is located as well as a significant portion of the computer operations that are the backbone of the company’s operations. Because of increased demand, PGI has just opened an operations center in Paris. All European- and UK-area business is now handled out of Paris, while the rest of the world’s demand is handled out of Austin. The company foresees that it may be necessary to locate another operations center in China if Asian demand continues to grow. The computer operations at each of the operating locations consist of both large and small computer servers where the images are stored, the company website is maintained, and the business records are kept. There is capacity at each location to increase the number of servers as demand increases, though the capacity for expansion is limited in the current facility in Austin. Required 1. Assuming PGI’s output volume is measured by the number of customer orders, provide some examples of the volume-based costs of this company. 2. How does the relevant range apply within this company? 3. How does the growth of PGI globally affect the firm’s total costs (consider also foreign currency fluctuations)?