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Yumball Candies manufactures jawbreaker candies in a fully automated process. The machine that produces candies was purchased recently and can make 4,800 jawbreakers per
Yumball Candies manufactures jawbreaker candies in a fully automated process. The machine that produces candies was purchased recently and can make 4,800 jawbreakers per month. The machine costs $10,000 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 $1,300 per month. Yumball currently makes and sells 3,400 jawbreakers per month. Yumball buys just enough materials each month to make the jawbreakers it needs to sell. Materials cost $0.30 per jawbreaker. Next year Yumball 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 requirements. Requirement 1. What is Yumball's current annual relevant range of output? Yumball's current annual relevant range of output is Requirements 0 to 3,400 jawbreakers 1. What is Yumball's current annual relevant range of output? 0 to 4,800 jawbreakers 0 to 40,800 jawbreakers 2. What is Yumball's current annual fixed manufacturing cost within the relevant range? What is the annual variable manufacturing cost? 3. What will Yumball's relevant range of output be next year? How if at all, will total annual fixed and variable manufacturing costs change next year? Assume that if it needs to Yumball could buy an identical machine at the same cost as the one it already has. 0 to 57,600 jawbreakers 3,400 to 4,800 jawbreakers 4,800 to 40,800 jawbreakers Print Done -
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