Question
These data are per unit: Direct materials: $600 Labor: $400 Variable cost of manufacturing: $200 Fixed cost of manufacturing: $500 Total cost of production: $1,700
These data are per unit:
Direct materials: $600
Labor: $400
Variable cost of manufacturing: $200
Fixed cost of manufacturing: $500
Total cost of production: $1,700
Variable operating cost: $100
Fixed operating costs: $2,000,000 monthly
Fixed manufacturing costs are $25,000,000; the normal production capacity of the plant is 50,000 units per month, therefore the fixed rate of application will be _____
Cost of labor is considered fixed; the normal capacity expressed in terms of labor is 50,000 hours, with a fixed cost of $20,000,000. The fixed rate of labor is then _____
Presently, this firm is producing and selling 30,000 "super-brothers" on the domestic market, at a price of $2,000 per unit. A new client from abroad wishes to buy 10,000 super-brothers (apart from the previous 30,000 sold on the domestic market) at $1,300, The response of the manufacturer using direct cost method would be: _____ (Respond with either yes the firm would accept the offer or no it would reject it, because if it accepted it would result in a marginal gain or loss of $ _____.)
The price that the manufacturer would demand using absorbent cost method would be $_____.
Under which method would the firm be most susceptible to accusations of dumping?
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