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Problem - A firm make and sells surfboards using revolutionary manufacturing processes and materials. The firm sells its surfboards for $110 to its distributors. The surfboards require $32 of foam and fiberglass and 1.0 direct labor hours and annual fixed costs of $475,000. The firm compensates its manufacturing employees at the rate of $25 per hour. The firm also applies variable manufacturing overhead at the rate of 60% of direct labor dollars. If the firm increases the quality of its direct materials, it will experience the following new product costs:
$45 direct materials
80% of the original labor hours
$50,000 more fixed costs
Applied overhead rate of 50% of the direct labor dollars
Required - What is the percentage change in sales dollars required to breakeven if the firm changes to the higher quality materials?
Which the? weighted-average process-costing method calculates the equivalent units? by? considering only the work done during the current period
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