2. A business produces one product which requires the following inputs:

Direct Materials 6 kg at $ 4,80 per kg

Direct labour 4 hour at $7 per hour

Building cost $18.000 per period

Leased machine $600 for every 600 units (each machine has a capacity of 600 units)

Store Cost $3.000 per period plus $3 per unit

a. What is the total cost of production and the cost per unit at each of the following

production levels: (20 points)

-1000 units

-2000 units

b. Explain why the cost per unit is different at each level of production