Question: THE FOLLOWING IMAGES WILL SHOW THE DROP DOWN MENU OPTIONS FOR REQUIREMENT 3 Sugarland Candies manufactures jaw-breaker candies in a fully automated process. The machine



THE FOLLOWING IMAGES WILL SHOW THE DROP DOWN MENU OPTIONS FOR REQUIREMENT 3






Sugarland Candies manufactures jaw-breaker candies in a fully automated process. The machine that produces candies was purchased recently and can make 4,800 per month. The machine costs $6,500 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 $800 per month. Sugarland currently makes and sells 3,900 jaw-breakers per month. Sugarland buys just enough materials each month to make the jaw-breakers it needs to sell. Materials cost 10 cents per jaw-breaker. Next year Sugarland 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. Requirements 1. What is Sugarland's current annual relevant range of output? 2. What is Sugarland's current annual fixed manufacturing cost within the relevant range? What is the annual variable manufacturing cost? 3. What will Sugarland'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 Sugarland could buy an identical machine at the same cost as the one it already has
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