A firm is considering two location alternatives. At location C, fixed costs would be $5,000,000 per year, and variablecosts $0.25 per unit. At alternative D, fixed costs would be $4,500,000 per year, with variable costs of $0.35 per unit. Ifannual demand is expected to be 4.5 million units, which plant offers the lowest total cost?Select one:O a. Plant C, because Plant C is cheaper than Plant D for all volumes.O b. Plant D, because Plant D is cheaper than Plant C for all volumes below 5 million units.Oc. Neither Plant C nor Plant D, because the crossover point is at 4.5 million units.O d. Plant D, because Plant D is cheaper than Plant C for all volumes.Oe. Plant C, because Plant C is cheaper than Plant D for all volumes below 5 million units.

Given data is Location Fixed cost Variable cost C $5,000,000 $0.25 D $4,500,000 $0.35…

Answered: A firm is considering two location…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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