A manufacturer is considering three possible locations for its new factory. The choice depends not only on the operating costs at each location but also on the cost of shipping the product to the three regions it serves. Given the operating and distribution costs in the following tables, which location would you recommend for a production volume of 80,000 units per year?

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A Construction cost $1,000,000 (amortized over 10 years) Material cost per unit Labor cost per unit Overhead: fixed Overhead: variable per unit To region A 1 2 3 2.46 $10,000 17,000 12,000 0.65 Total Distribution Costs 100,000 0.15 Location B $1,800,000 2.17 0.62 150,000 0.18 Location B $20,000 10,000 18,000 $950,000 2.64 0.67 125,000 0.12 C $26,000 15,000 10,000