Randazzo may produce 80,000 components per year for various vehicles and 5,000 per year for the…
Randazzo may produce 80,000 components per year for various vehicles and 5,000 per year for the corvette. Selling prices vary greatly across the product line as a result of market supply and demand. The machine shop is automated. By changing cutting tools and entering different measurements into the system a variety or products can be manufactured. Many production costs are variable and can be traced to individual products. The cost accountant recently completed a study that associated cost and revunue data with each product listed in the company’s catalog. The accountant estimated $600,000 of fixed costs would be associated with the production of these ten products.