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Doughboy Bakery would like to buy a new machine for putting icing and other toppings on pastries. These are now put on by hand. The machine that the bakery is considering costs $88,000 new. It would last the bakery for sixteen years but would require a $9,500 overhaul at the end of the thirteenth year. After sixteen years, the machine could be sold for $8,000.
The bakery estimates that it will cost $16,000 per year to operate the new machine. The present manual method of putting toppings on the pastries costs $36,500 per year. In addition to reducing operating costs, the new machine will allow the bakery to increase its production of pastries by 7,000 packages per year. The bakery realizes a contribution margin of $1.00 per package. The bakery requires a 13% return on all investments in equipment.
1. job order costing is applicable to manufacturing firms only and not service firms.true or false2.an organizational
hickory company manufactures two productsacirceuro14000 units of product y and 6000 units of product z. the company
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