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A company manufactures a product with the following costs: Direct materials $10 per unit, Direct labor $15 per unit, and Variable overhead $5 per unit.
A company manufactures a product with the following costs: Direct materials $10 per unit, Direct labor $15 per unit, and Variable overhead $5 per unit. The fixed overhead is $50,000. Calculate the total manufacturing cost per unit and discuss the importance of distinguishing between fixed and variable costs in cost analysis and decision-making processes. Additionally, explore how understanding cost behavior helps in setting prices, budgeting, and evaluating profitability.
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