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Problem 4-20A (Static) Cost allocation in a manufacturing company LO 4-1, 4-2, 4-3 Camp Manufacturing Company makes tents that it sells directly to camping
Problem 4-20A (Static) Cost allocation in a manufacturing company LO 4-1, 4-2, 4-3 Camp Manufacturing Company makes tents that it sells directly to camping enthusiasts through a mail-order marketing program. The company pays a quality control expert $80,000 per year to inspect completed tents before they are shipped to customers. Assume that the company completed 1,600 tents in January and 1,200 tents in February. For the entire year, the company expects to produce 20,000 tents. Required a. As the number of tents inspected increases, does the amount of fixed cost increase, decrease, or stay the same? b. As the number of tents inspected increases, does the fixed cost per unit increase, decrease, or stay the same?
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