Once the number of hits and wounds has been determined the player owning the target unit must remove any casualties that have been inflicted. This means that the owning player gets to choose who is hit by the enemy's firing. Assuming that the models in the unit have 1 wound each, one model is removed for each wound inflicted.
Note that you can't choose to lump all of the wounds together onto one model!
The owning player can remove any models from the unit, providing they're within range of the attacker's weaponry. He can even remove models from the rear of the unit – these troops were slain as they advanced and the rest of the unit continued moving forward. Likewise powerful weapons will be picked up by other members of the unit and so on, so it's perfectly fair for a player to avoid taking casualties on (for example) heavy weapons or squad leaders if he doesn't want to.