Question
Value minus ColaValueCola spends $ 3$3 on direct materials, direct labor, and variable manufacturing overhead for every unit (12-pack of soda) it produces. Fixed manufacturing
Value minus ColaValueCola
spends
$ 3$3
on direct materials, direct labor, and variable manufacturing overhead for every unit (12-pack of soda) it produces. Fixed manufacturing overhead costs
$ 3$3
million per year. The plant, which is currently operating at only
6565%
of capacity, produced
1515
million units this year. Management plans to operate closer to full capacity next year, producing
2525
million units. Management doesn't anticipate any changes in the prices it pays formaterials, labor, and manufacturing overhead.Read therequirements
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.
Requirement 1. What is the current total product cost (for the
1515
million units), including fixed and variable costs?Determine the formula, then calculate the current total product cost (for the
1515
million units), including fixed and variable costs.
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