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During its first year of operations, Big Company paid $25,000 for direct materials and $18,000 in wages for production workers. Rent payments and utilities on
During its first year of operations, Big Company paid $25,000 for direct materials and $18,000 in wages for production workers. Rent payments and utilities on the production facilities amounted to $7,000. General, selling, and administrative expenses were $8,000. The company produced 5,000 units and sold 4,000 units for $15.00 a unit. The average cost to produce one unit is which of the following amounts?
a. | $10.00 | |
b. | $9.20 | |
c. | $11.50 | |
d. | $8.00 |
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