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Doorbell Candles manufactures candle holders and sells them in a competitive market at $8 each. There is a specialized machine for producing the holders. The production capacity of the machine is 4,400 candle holders per month. The machine costs $70,000 and is depreciated using straight-line depreciation over 5 years assuming zero residual value. When only one machine is used, rent for the factory space and warehouse is $1,300 per month.
Problem a) Calculate and explain Doorbell's annual relevant range of output with respect to cost behaviors for the current year?
Problem b) Calculate and explain Doorbell's annual relevant range of output with respect to cost behaviors for the next year?
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