Rocket Life manufactures small toy rockets. At their normal level of activity of 50,000 units, the cost of producing a single rocket is: Direct Materials $4.00 Direct Labor $2.00 Variable Manufacturing Overhead $1.00 Fixed Manufacturing Overhead $3.00 Variable Selling & Admin Expenses $2.00 Fixed Selling & Admin Expenses $3.00 The company sells each rocket for $20 per unit. The company has capacity to produce 60,000 rockets per year, even though they produce only 50,000.
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