Question

The Janesky Company has collected data on the manufacture of 6,111 robot grippers last month. The breakdown of total costs is shown below. They now need to plan for future months.

Units sold last month	6,111
Direct materials	$277,186
Direct labor	$464,081
Manufacturing variable overhead	$450,231
Selling and administrative costs	$170,971

What would be the break even price to produce and sell 2,033 units in the coming month?

Answer 1

Direct materials	$     92,213.90
Direct labor	$ 1,54,389.90
Manufacturing variable overhead	$ 1,49,782.30
Total Variable cost	$ 3,96,386.10
Add: Total Fixed cost	$ 1,70,971.00
Total cost	$ 5,67,357.10
Units to be sold	2033
Unit price to breakeven	$           279.07

Working

Direct materials	=277186/6111*2033
Direct labor	=464081/6111*2033
Manufacturing variable overhead	=450231/6111*2033
Total Variable cost	+92213.90+154389.90+149782.30
Add: Total Fixed cost	170971
Total cost	+396386.10+170971
Units to be sold	2033
Unit price to breakeven	=567357.10/2033