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Sweetum Candies manufactures jawbreaker candies in a fully automated process. The machine that produces candies was purchased recently and can make 4,100 jawbreakers per month.

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Sweetum Candies manufactures jawbreaker candies in a fully automated process. The machine that produces candies was purchased recently and can make 4,100 jawbreakers per month. The machine costs $6,400 and is depreciated using straight-line depreciation over 10 years assuming zero residual value. Rent for the factory space and warehouse and other fixed manufacturing overhead costs total $1,500 per month. Sweetum currently makes and sells 3,000 jawbreakers per month. Sweetum buys just enough materials each month to make the jawbreakers it needs to sell. Materials cost $0.40 per jawbreaker. Next year Sweetum expects demand to increase by 100%. At this volume of materials purchased, it will get a 10% discount on price. Rent and other fixed manufacturing overhead costs will remain the same. Read the reguirements

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