course hero 7 - Total variable cost per unit = $4.68 +...

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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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This note was uploaded on 04/23/2010 for the course BUS Business 1 taught by Professor B.mishra during the Spring '10 term at UC Riverside.

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