Candies manufactures jaw-breaker candies in a fully automated process. The machine that produces candies was purchased recently and can make

5 comma 0005,000

per month. The machine costs

$ 6 comma 500$6,500

and is depreciated using straight line depreciation over 10 years assuming zero residual value. Rent for the factory space and warehouse and other fixed manufacturing overhead costs total

$ 1 comma 200$1,200

per month.

Gummy LandGummy Land

currently makes and sells

3 comma 9003,900

jaw-breakers per month.

Gummy LandGummy Land

buys just enough materials each month to make the jaw-breakers it needs to sell. Materials cost

4040

cents per jaw-breaker. Next year

Gummy LandGummy Land

expects demand to increase by 100%. At this volume of materialspurchased, it will get a 10% discount on price. Rent and other fixed manufacturing overhead costs will remain the same.

1.	What is Gummy LandGummy Land's current annual relevant range of output?
2.	What is Gummy LandGummy Land's current annual fixed manufacturing cost within the relevant range? What is the annual variable manufacturing cost?
3.	What will Gummy LandGummy Land's relevant range of output be next year? How if at all, will total annual fixed and variable manufacturing costs change next year? Assume that if it needs to Gummy LandGummy Land could buy an identical machine at the same cost as the one it already has.