Question: At location A , fixed costs would be $ 4 , 0 0 0 , 0 0 0 per year, and variable costs $ 0

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?

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