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Case Study: ACME Inc. has current assets of $450,000 and capital assets of $630,000. Its budgeted production volume for the next fiscal year is 200,000 units. Fixed costs are projected at $400,000 and variable unit costs for the one product produced total $5/unit. The company defines ROI as Operating Income/Total Assets and its required rate of return is 14%.
Required:
Compute the total manufacturing costs charged to work in process for the current year. Compute the cost of finished goods manufactured for the current year.
Management believes that these actions will increase unit sales by 50%. Should these changes be made
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