Question
Gwendolyn Gwendolyn's Glassworks makes glass flanges for scientific use. Materials cost $ 2 $2 per flange, and the glass blowers are paid a wage rate
Gwendolyn Gwendolyn's Glassworks makes glass flanges for scientific use. Materials cost $ 2 $2 per flange, and the glass blowers are paid a wage rate of $ 22 $22 per hour. A glass blower blows 10 10 flanges per hour. Fixed manufacturing costs for flanges are $ 29 comma 000 $29,000 per period. Period (nonmanufacturing) costs associated with flanges are $ 19 comma 000 $19,000 per period and are fixed. Read the requirements LOADING... . Requirement 1. Select the graph that shows fixed, variable, and total manufacturing cost for flanges, using units (number of flanges) on the x-axis. (Enlarge each graph before selecting your answer.) A. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 0 100,000 Number of flanges Cost Fixed costs Variable costs Total costs x y graph B. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 0 100,000 Number of flanges Cost Fixed costs Variable costs Total costs x y graph C. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 0 100,000 Number of flanges Cost Fixed costs Total costs Variable costs x y graph D. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 0 100,000 Number of flanges Cost Fixed costs Total costs Variable costs x y graph Requirement 2. Assume Gwendolyn Gwendolyn's Glassworks manufactures and sells 6 comma 000 6,000 flanges this period. Their competitor, Finn Finn's Flasks, sells flanges for $ 11.50 $11.50 each. Can Gwendolyn Gwendolyn sell below Finn Finn's price and still make a profit on the flanges? (Round the total cost per unit to two decimal places.) Begin by determining the formula used to calculate the total cost per unit. ( + ) / = Total cost per unit The total cost per unit when manufacturing 6,000 flanges is $ ; therefore, they sell below Finn's price and still make a profit. Requirement 3. How would your answer to requirement 2 differ if Gwendolyn Gwendolyn's Glassworks made and sold 12 comma 000 12,000 flanges this period? Why? What does this indicate about the use of unit cost in decision making? (Round the total cost per unit to two decimal places.) The total cost per unit when manufacturing 12,000 flanges would be $ . With production and sales at this level, the company could potentially could not make a profit if the selling price is below $ 11.50 $11.50 each. Managers must be cautious using unit costs for decision making because total fixed costs total variable costs remain the same regardless of the number of units produced. Choose from any list or enter any number in the input fields and then continue to the next question.
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