Consider the product structure tree shown below: 
With a beginning inventory of twenty for all components on level one, five for all components on level two, and zero for all components on level three and finished items, how many of each component on level three are needed to produce 25 product X's?
Definitions:
Annual Fixed Costs
Costs that do not vary with the volume of production or sales and are incurred on a yearly basis.
Variable Costs
Expenses that vary directly with levels of production.
Fixed Costs
Fixed costs refer to the expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.
Normal Rates
The usual or average rates for something within a particular context, such as interest rates or growth rates.
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