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Question - A Tyre company currently produces 2,000 tyres per month. The following per unit data apply for sales to regular customers:
Direct materials $25
Direct labour $3
Variable manufacturing overhead $5
Fixed manufacturing overhead $12
Total manufacturing costs $45
The plant has capacity for 8,000 tyres and is considering expanding production to 5,000 tyres. Compute the total cost of producing 5,000 tyres.
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