Night Shades Inc. (NSI) manufactures biotech sunglasses. The Variable materials
ID: 2756114 • Letter: N
Question
Night Shades Inc. (NSI) manufactures biotech sunglasses. The Variable materials cost is $1.57 per unit, and the variable labor cost is $2 51 per unit. What is the variable cost per unit? (Do not round your intermediate calculations.) Suppose NSl incurs fixed costs of $600,000 during a year in which total production is 330,000 units. What are the total costs for the year? (Do not round your intermediate calculations.) If the selling price is $11.15 per unit, what is the NSI break-even on a cash flow basis (in units)? (The level of sales in units at which the cash flow is zero). (Do not round your intermediate calculations.) If depreciation is $198,000 per year, what is the accounting break-even point (in units)? (Do not round your intermediate calculations.)Explanation / Answer
1
Calculation of Variable cost per unit :
Variable Material Cost Per unit
$ 1.57
Add: Variable Labor cost per unit
$ 2.51
Variable cost per unit
$ 4.08
2
Calculation of Total cost for the year :
Variable costs = 330000 Units * $4.08
$ 1,346,400
Add: Fixed Costs
$ 600,000
Total cost for the year
$ 1,946,400
3-a
Calculation of Break even Point (Units)
Total Fixed Costs (A)
$ 600,000
Selling Price (B)
$ 11.15
Variable Cost per unit (C)
$ 4.08
Contribution Per Unit (D) = B-C
$ 7.07
Break even Point (Units) = A/D
84,866
3-b
Calculation of Accounting Breakeven Point :
Cash Fixed Costs
$ 600,000
Add: Depreciation
198000
Total Fixed Costs (A)
$ 798,000
Selling Price (B)
$ 11.15
Variable Cost per unit (C)
$ 4.08
Contribution Per Unit (D) = B-C
$ 7.07
Break even Point (Units) = A/D
112,871
1
Calculation of Variable cost per unit :
Variable Material Cost Per unit
$ 1.57
Add: Variable Labor cost per unit
$ 2.51
Variable cost per unit
$ 4.08
2
Calculation of Total cost for the year :
Variable costs = 330000 Units * $4.08
$ 1,346,400
Add: Fixed Costs
$ 600,000
Total cost for the year
$ 1,946,400
3-a
Calculation of Break even Point (Units)
Total Fixed Costs (A)
$ 600,000
Selling Price (B)
$ 11.15
Variable Cost per unit (C)
$ 4.08
Contribution Per Unit (D) = B-C
$ 7.07
Break even Point (Units) = A/D
84,866
3-b
Calculation of Accounting Breakeven Point :
Cash Fixed Costs
$ 600,000
Add: Depreciation
198000
Total Fixed Costs (A)
$ 798,000
Selling Price (B)
$ 11.15
Variable Cost per unit (C)
$ 4.08
Contribution Per Unit (D) = B-C
$ 7.07
Break even Point (Units) = A/D
112,871
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.