Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials

Question

Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $1.4 per unit, and the variable labor cost is $2.1 per unit.

(Click to select)

3.4

2.1

3.5

1.4

3.6

Suppose NSI incurs fixed costs of $470,000 during a year in which total production is 235,000 units. What are the total costs for the year? (Do not round your intermediate calculations.)

(Click to select)

1,357,125

1,292,500

822,500

1,227,875

1,192,500

If the selling price is $10.5 per unit, what is the NSI break-even on a cash basis? (Do not round your intermediate calculations.)

(Click to select)

68,143 units

67,143 units

85,607 units

70,500 units

63,786 units

If depreciation is $129,250 per year, what is the accounting break-even point? (Do not round your intermediate calculations.)

Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $1.4 per unit, and the variable labor cost is $2.1 per unit.

Explanation / Answer

Variable cost per unit:

= $1.4+$2.1

= $3.5

Total costs:

= $470,000+235,000×$3.5

= $1,292,500

NSI break even:

= $470,000÷($10.5-$3.5)

= 67,143 units

Accounting break even:

= ($470,000+$129,250)÷($10.5-$3.5)

= 85,607 units

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.