Neco 2021 Geography Question 12

A manufacturing firm is evaluating two possible locations for a new plant. The data are as follows:\n\nLocation A:\n- Fixed capital cost: ₦2,000,000 (amortised over 5 years).\n- Variable labour cost per unit: ₦180. Labour tax: 5% of labour cost.\n- Transport cost per km per unit: ₦0.44. Distance to market: 250 km.\n- Labour‑hour requirement per unit: 0.6 h. Annual labour‑hour availability: 6,000 h.\n\nLocation B:\n- Fixed capital cost: ₦5,000,000 (amortised over 5 years).\n- Variable labour cost per unit: ₦200. Labour tax: 10% of labour cost.\n- Transport cost per km per unit: ₦0.20. Distance to market: 150 km.\n- Labour‑hour requirement per unit: 0.6 h. Annual labour‑hour availability: 12,000 h.\n\nThe firm plans to produce either 10,000 units or 20,000 units per year. For each production level, determine which location is more cost‑effective, taking into account total cost per unit and the labour‑availability constraint.