Question
| Location |
Fixed Cost Per Year |
Variable Cost Per Unit |
| A |
$250,000 |
$11 |
| B |
$100,000 |
$30 |
| C |
$150,000 |
$20 |
| D |
$200,000 |
$35 |
(i) Identify the range of output for which each alternative is superior (i.e. has the lowest total cost).
(ii) If the expected output at the selected location is to be 8,000 units per year, which location would provide the lowest total cost.