Night Shades, Incorporated, manufactures biotech sunglasses. The variable materials cost is $12.84 per unit, and the variable labor cost is $7.21 per unit. a. What is the variable cost per unit? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. Suppose the company incurs fixed costs of $900,000 during a year in which total production is 200,000 units. What are the total costs for the year? Note: Do not round intermediate calculations. c. If the selling price is $49.99 per unit, does the company break even on a cash basis? If depreciation is $425,000 per year, what is the accounting break-even point? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. a. Variable cost b. Total cost c. Cash break-even point Accounting break-even point $ 20.05 $ 4,910,000 units units

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Question

1. I need help with this question. 

Night Shades, Incorporated, manufactures biotech sunglasses. The variable materials cost is $12.84 per unit, and the variable labor
cost is $7.21 per unit.
a. What is the variable cost per unit?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
b. Suppose the company incurs fixed costs of $900,000 during a year in which total production is 200,000 units. What are the total
costs for the year?
Note: Do not round intermediate calculations.
c. If the selling price is $49.99 per unit, does the company break even on a cash basis? If depreciation is $425,000 per year, what is
the accounting break-even point?
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
a. Variable cost
b. Total cost
c. Cash break-even point
Accounting break-even point
$
20.05
$
4,910,000
units
units
Transcribed Image Text:Night Shades, Incorporated, manufactures biotech sunglasses. The variable materials cost is $12.84 per unit, and the variable labor cost is $7.21 per unit. a. What is the variable cost per unit? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. Suppose the company incurs fixed costs of $900,000 during a year in which total production is 200,000 units. What are the total costs for the year? Note: Do not round intermediate calculations. c. If the selling price is $49.99 per unit, does the company break even on a cash basis? If depreciation is $425,000 per year, what is the accounting break-even point? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. a. Variable cost b. Total cost c. Cash break-even point Accounting break-even point $ 20.05 $ 4,910,000 units units
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