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A manufacturing facility is considering two location alternatives, X and Y. At location X, fixed costs would be

$5,000,000 per year and variable costs would be $0.30 per unit. At location Y, fixed costs would be $4,600,000 per year and variable costs would be $0.40 per unit. If annual demand is expected to be 10 million units, which location should be chosen?

A. Plant X, because it is cheaper than Plant Y for all volumes.

B. Plant Y, because it is cheaper than Plant X for all volumes over 4,000,000 units.

C. Plant X, because it is cheaper than Plant Y for all volumes over 4,000,000 units.

D. Plant Y, because it has the lower variable cost per unit.

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