ABC company has plans to establish a new factory to make its flying toy drones. The plant developers have proposed a small plant with a capacity of 5 million units. The variable cost for the drones is estimated at $8 per unit. The average unit cost, including fixed cost would then be around $ 20 per unit at full capacity. The plant developers have also suggested that factories of this nature, in the same location, ( which could take of future growth of the market) exhibit a scale factor of 0.90. Note scale factor is based on average total unit cost ie considering both fixed and variable costs. a) What should be the utilization of a bigger plant, with twice the capacity of the smaller proposed plant such that cost parity is maintained and the big plant would result in the same average unit cost as the smaller plant running at full capacity? b) If ABC goes for the bigger plant, but the output remains the same as current value ie 5 million units ( as current demand is 5 m units) , what would be the new average unit cost