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Producing 20,000 Cell Phone Units Requires $600,000 of Prime Costs

Question 84

Multiple Choice

Producing 20,000 cell phone units requires $600,000 of prime costs, uses 4,000 machine hours, and takes 2,400 setup hours. The activity rates are $80 per machine hour and $200 per setup hour. What is the unit cost of a cell phone?


A) $30
B) $40
C) $60
D) $70

Correct Answer:

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