Wednesday 9 July 2014

Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $18.50 per unit, and the variable labor cost is $7.00 per unit.

Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $18.50 per unit, and the variable labor cost is $7.00 per unit.

a.
What is the variable cost per unit? (Round your answer to 2 decimal places. (e.g., 32.16))

  Variable cost $  
  
b.
Suppose NSI incurs fixed costs of $800,000 during a year in which total production is 350,000 units. What are the total costs for the year?
  
  Total cost $  
  
c.
If the selling price is $48.00 per unit, what is the cash break-even point? If depreciation is $600,000 per year, what is the accounting break-even point? (Round your answers to 2 decimal places. (e.g., 32.16))

  Cash break-even point units  
  Break-even point units  


Explanation:

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