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Please show your working and explain the reasoning for your answer. GoodThings Ltd is about to introduce a new thing and has determined that it
Please show your working and explain the reasoning for your answer.
GoodThings Ltd is about to introduce a new thing and has determined that it will charge $30 per thing. The company must decide whether or not to purchase a high-capacity thing-making machine. If the high-capacity machine is selected, then the fixed costs for the company will be $5,000 per year, with variable costs thing. Otherwise the fixed costs will be $1,000, with variable costs of $15 per thing. Above what level of expected sales should GoodThings choose the high fixed cost alternative? $5 per Select one: O a. 500 units O b. 4000 units O c. 5000 units O d. 400 units Good Things Ltd is in the process of determining whether to purchase another high capacity machine to make even more things. This high capacity machine will generate fixed costs of $10,000 per year versus the $2,000 fixed costs of using an existing standard capacity machine. The variable costs per unit when using the high capacity machine will be $30. The company will charge $60 for each thing and has determined that the high capacity machine will be more economically beneficial if sales are greater than 800 things. What is the contribution margin per unit under the standard capacity machine scenario? Select one: O a. $40 O b. $10 O c. $30 O d. $20Step by Step Solution
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