Question: . Process A has fixed costs of $4,000,000 per year, and variable costs 0.30 per unit. Process B has fixed costs of $3,600,000 per year,

. Process A has fixed costs of $4,000,000 per year, and variable costs 0.30 per unit. Process B has fixed costs of $3,600,000 per year, and variable costs of $0.35 per unit. If demand is expected to be 10 million units, which plant offers the lowest total cost?

a. Plant A, because it is cheaper than Plant B for all volumes under 8,000,000 units

b. Plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units

c. Plant A, because it is cheaper than Plant B for all volume

d. Plant B, because it has the lower variable cost per unit

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