The Cycle Centre Currently Produces 1000 Bicycles Per Month The Plant Has Capacity for 3000 Bicycles and Is Considering

question 241

Multiple Choice

The Cycle Centre currently produces 1000 bicycles per month.The following per unit data apply for sales to regular customers:
$\begin{array}{lr}\text { Direct materials } & \$ 50 \\\text { Direct manufacturing labour } & 5 \\\text { Variable manufacturing overhead } & 14 \\\text { Fixed manufacturing overhead } & \underline{10} \\{\text { Total manufacturing costs }} & \$ 79\end{array}$
The plant has capacity for 3000 bicycles and is considering expanding production to 2000 bicycles.What is the per unit cost of producing 2000 bicycles?

• A)$134 per unit
• B)$158 per unit
• C)$74 per unit
• D)$79 per unit

Identify the consequences of binding and nonbinding price floors on supply, demand, and market surplus or shortage.

Analyze the impact of government price supports in agricultural markets.

Recognize the role of price controls in creating inefficiencies in the market.

Evaluate the effects of minimum wage laws on employment and market dynamics.

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