Location	Fixed Costs		Variable Costs per unit
Upper AA	$ 12 comma 000 comma 000$12,000,000		$ 2 comma 600$2,600
Upper BB	$ 20 comma 000 comma 000$20,000,000		$ 2 comma 000$2,000
Upper CC	$ 30 comma 000 comma 000$30,000,000		$ 1 comma 100$1,100

Production manager is determined to identify the best lcation possible..

a) Volume of production above which location

Upper CC

is recommended =

nothing

units (round your response up to the next whole number).

b) Volume of production below which location

Upper AA

is recommended =

nothing

units (round your response up to the next whole number).

c) Over what range of volume is location

Upper BB

optimal?

A.Location

Upper BB

is always optimal because its cost line is always below that of A and C for all volume levels.

B.Location

Upper BB

is optimal for volumes above

13 comma 33413,334

units.

C.Location

Upper BB

is never optimal because its cost line always exceeds that of A or C for all volume levels.

D.Location

Upper BB

is optimal for volumes from

12 comma 00012,000

to

13 comma 33413,334

units.

Due to increase in demand for Mazda's popular model XII, their production manager has narrowed the search for a new facility location to three sites: A, B, and C to locate a new production facility to build their new-model XII. The objective is to identify a site with minimum production cost, where cost is measured by the annual fixed cost plus variable cost per unit. Both the annual fixed costs and variable costs are provided below: