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# course hero 7 - Total variable cost per unit = \$4.68 \$2.27...

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Business, Finance - Other Calculating Costs and Break-Even: Night Shades Inc. (NSI) manufacturers biotech sunglasses. The variable materials cost is \$4.68 per unit, and the variable labor cost is \$2.27 per unit. a.What is the variable cost per unit? b.Suppose NSI 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? c.If the selling price is \$11.99 per unit, does NSI break even on a cash basis? If depreciation is \$190,000 per year, what is the accounting break-even point?
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Unformatted text preview: Total variable cost per unit = \$4.68 + \$2.27 = \$6.95 Total cost = VC per unit * units + Fixed cost = \$6.95 * 320000 + \$650 000 = \$2874000 Cash break even point = Fixed Cost / Contribution Margin per unit = \$650000 / \$11.99 - \$6.95 = 128968 units. NSI certainly breakeven on cash basis as its production is 320000 units Accounting break even point = Fixed Cost + Depreciation / Contribution Margin per unit = \$650000 + \$190000/ \$11.99 - \$6.95 = 166667 units....
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