Solutions for Homework ** Accounting 311 Cost ** Winter 2009
Fixed costs for next year will increase to $13,200, $12,600 from the current year + $600 (because rent and other fixed overhead costs will remain the same at $12,000). That is, total fixed costs for next year equal $600 (depreciation on first machine) + $600 (depreciation on second machine) + $12,000 (rent and other fixed overhead costs). ................
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