Question

Reference: Table 1

Tech Engineering in TN is making a product for the overseas market. The following cost data for the product has been compiled.

Item	Cost
Selling price	$167
Materials and purchased parts	$25/unit
Direct Labor	2 hrs at $20 per hour
Fixed Cost	$1,400,000

2. If the overhead expenses are charged at 80 % of labor cost, determine the manufacturing cost per unit.

   A) $72
   B) $97
   C) $65
   D) None of these Refer to: Table 1

3. The breakeven volume for this product is ____________. A) 14,433

   B) 8,383
   C) 20,000
   D) None of these Refer to: Table 1

4. What is the profit per unit if 30,000 units are sold? a) $23.33

5. B) $20.81

C) $24.35
D) None of these Refer to: Table 1

5. To reduce the breakeven volume to 15,000 units, what should be the selling price? A) $210.33

B) $190.33
C) $241.35
D) None of these Refer to: Table 1

Answer 1

Answer =

• Manufacturing cost per unit = $97
• Break even volume = 20000
• Profit per unit if 30000 unite are sold = $23.33
• Selling price if break even volume reduced to 15000 units = $190.33

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