Chapter+10+Problems - Chapter 10 Problems 1 ABC Inc Manufactures biotech sunglasses The variable materials cost $1.43 per unit and the variable labour

Chapter+10+Problems - Chapter 10 Problems 1 ABC Inc...

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Chapter 10 Problems 1- ABC Inc. Manufactures biotech sunglasses. The variable materials cost $1.43 per unit and the variable labour cost is $2.44 per unit. a- What is the variable cost per unit? ($3.87) b- Suppose the firm incurs fixed costs of $650,000 during a year in which total production is 320,000 units. What are the total costs for the year? ($1,888,400) c- If the selling price is $10 per unit, what is the cash break-even point? If depreciation is $190,000 per year, what is the accounting break-even point? (106,036 units; 137,031 units) 2- XYZ Corp. can manufacture mountain climbing shoes for $16.51 per pair in variable raw material costs and $18.50 per pair in variable labour expense. The shoes sell for $105 per pair. Last year, production was 150,000 pairs. Fixed costs were $800,000. Calculate the following: total production costs, marginal cost per pair and average cost. If the company is considering a one-time order for an extra 10,000 pairs, what is the minimum acceptable total revenue from the order? ($6,051,500; $35.01; $40.34; $350,100) 3- Louise Inc. has the following estimates for its new gear assembly project: price = $1,900
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  • Fall '13
  • accounting break-even point

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