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Q 8 . Gayle's Glassworks makes glass vases. Materials cost $ 1 per vase, and the glass blowers are paid a wage rate of $
Q Gayle's Glassworks makes glass vases. Materials cost $ per vase, and the glass blowers are paid a wage rate of $ per hour. A glass blower blows vases per hour. Fixed manufacturing costs for vases are $ per period. Period nonmanufacturing costs associated with vases are $ per period and are fixed.
a Graph the fixed, variable, and total manufacturing cost for vases
b Assume Gayle's Glassworks manufactures and sells vases in this period. Its competitor, Flora's Flasks, sells vases for $ each. Can Gayle sell below Flora's price and still make a profit on the vases?
c How would your answer to requirement differ if Gayle's Glassworks made and sold flanges this period? Why? What does this indicate about the use of unit cost in decision making?
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