Health Center makes and sells faucets for $125.00 per unit. Direct materials are $65 per unit, while direct manufacturing labour averages $23 per unit. Variable manufacturing overhead is $20 per unit and fixed manufacturing overhead is $420,000 per year. Administrative expenses, all fixed, run $156,000 per year, with sales commissions of $10 per part. Production is 300,000 faucets per year. And this year, 290,000 were sold.
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