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A firm is considering two location alternatives. At location A, fixed costs would be $4,000,000 per year, and variable costs $0.30 per unit. At alternative

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A firm is considering two location alternatives. At location A, fixed costs would be $4,000,000 per year, and variable costs $0.30 per unit. At alternative B, fixed costs would be $3,600,000 per year, with variable costs of $0.35 per unit. If annual demand is expected to be 10 million units, which plant offers the lowest total cost? a. Plant A, because it is cheaper than Plant B for all volumes. b. Plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units. c. Plant B, because it has the lower variable cost per unit. d. Plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units. e. Neither Plant A nor Plant B, because the crossover point is at 10 million units

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