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WDY Corporation currently sells its primary product for $85 per unit, with a profit margin of 30%. Cost of goods sold totals 40% of the product's total cost. WDY's managers are considering implementing a Kaizen costing system.
As part of its Kaizen costing project, WDY's accountants estimate the price of the product will decline by 20% next year. If WDY is successful in achieving its Kaizen goal, the reduced nonmanufacturing cost (i.e., the cost excluding the product cost) per unit will be:
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