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Q1) Generators, Inc. manufactured emergency backup generators for use in large commercial buildings. Costs of manufacturing and marketing generators at company's normal volume of 3,000 units per month are shown in Exhibit 1.

Exhibit 1 Costs per Unit for Generators

Unit Manufacturing costs:     
Variable Materials  1000  
Variable Labor  1500  
Variable Overhead  500  
Fixed Overhead  1200  
Total Manufacturing Cost    4200
Unit Marketing Costs:     
Variable  500  
Fixed  1400  
Total Marketing Cost    1900
     
Total Unit Cost:    6100

Following problems refer only to data given above. Unless otherwise stated, suppose there is no connection between situations describeed in each of the problems, each is to be treated independently. Unless otherwise stated, regular selling price of $7,400 per unit must be assumed. Ignore income taxes and other costs which are not mentioned in Exhibit 1 or in problem itself.

Determine break-even volume in units? In sales dollars?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M921317

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