The manufacturing unit of the company can produce a particular type of personal protective equipment on its existing four different manufacturing lines

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The manufacturing unit of the company can produce a particular type of personal protective equipment on its existing four different manufacturing lines. The following table summarizes the manufacturing costs associated with producing the equipment on each manufacturing line along with the available capacity on each line. Currently the management is interested to produce 4000 equipment based on their demand.

The fixed cost (shown in column 2) is one-off indirect cost for manufacturing line set- up at the beginning of manufacturing operation. The variable cost is the direct cost per unit product for materials, machining time, labour, packaging, etc. So, the overall cost

per unit is the sum of the share of indirect cost plus the direct cost. (For further details on fixed cost problems, read section 6.14 in your text.)

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