Question: Great-Cola spends $3 on direct materials, direct labor, and variable manufacturing overhead for every unit (12- pack soda) it produces. Fixed manufacturing overhead costs $7

Great-Cola spends $3 on direct materials, direct labor, and variable manufacturing overhead for every unit (12- pack soda) it produces. Fixed manufacturing overhead costs $7 million per year. The plant, which is currently operating at only 80% of capacity, produced 25 million units this year. Management plans to operate a closer to full capacity next year, producing 35 million units. Management doesnt anticipate any changes in the prices it pays for materials, labor, and manufacturing overhead. Great-Cola spends $3 on direct materials, direct labor, and variable manufacturing

overhead for every unit (12- pack soda) it produces. Fixed manufacturing overhead

costs $7 million per year. The plant, which is currently operating at

only 80% of capacity, produced 25 million units this year. Management plans

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