Cost Accounting Quiz
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PRICING AND PROFITABILITY
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A company's cost structure includes prime costs of $40 per unit and conversion costs of $35 per unit. Of the conversion costs, $15 is for variable manufacturing overhead. Total fixed manufacturing overhead is $200,000 for a production run of 20,000 units. Direct labor is the only cost component common to both prime and conversion costs. What is the full manufacturing cost per unit, to be used as a basis for cost-plus pricing?
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