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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 $0.35 per unit. If annual demand is expected to be 10 million units, which plant offers the lowest total cost?

User Naomie
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Answer:Pick option A

Step-by-step explanation:

Option A will be the answer because even though the fixed cost is higher, the total cost is lower than option b

A firm is considering two location alternatives. At location A, fixed costs would-example-1
User Martin Verner
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