Question

Soneva Enterprise manufactures two models of boats- Regular & Deluxe, using a combination of hand finishing and machining. Machine setup costs are driven by the number of setups. Indirect labor cost increase with direct labor costs. Equipment and maintenance costs increase with the number of machine hours, and facility rent is paid per square foot. The capacity of the facility is 6250 square foot and Soneva is using only 80% of this capacity. Soneva records the cost of unused capacity as a separate line item and not as a product cost. For 2021, Soneva has budgeted the following:

Answer 1

Answer:

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