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,...

Extracted text: 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 $0.34 per unit. If annual demand is expected to be 9 million units, which plant offers the lowest total cost? Plant B, because it has the lower variable cost per unit. Plant A, because it is cheaper than Plant B for all volumes below 10,000,000 units. Plant A, because it is cheaper than Plant B for all volumes. Plant B, because it is cheaper than Plant A for all volumes below 10,000,000 units. Neither Plant A nor Plant B, because the crossover point is at 9 million units.