Assignment Material 2-21 Total and unit costs, decision making. (LO 3,4,5) Graham's Glassworks makes...
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Total and unit costs, decision making. LO Graham's Glassworks makes glass flanges for scientific use. Materials cost $ per flange, and the glass blowers are paid a wage rate of $ per hour. A glass blower blows flanges per hour. Fixed manufacturing costs for flanges are $ per period. Period nonmanufacturing costs associated with flanges are $ per period and are fixed.
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Fred's Flasks sells flanges for $ each. Can Graham sell below Fred's price and still make a profit on the flanges? Assume Graham produces and sells flanges this period.
How would your answer to requirement differ if Graham's Glassworks made and sold flanges this period? Why? What does this indicate about the use of unit cost in decision making?
Check Figure: The variable direct manufacturing unit cost, $ flange
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