1. 1.

Calculating costs and break-even [LO 11.3] Allanooka Shades Ltd

(ASL) manufactures biotech sunglasses. The variable materials cost is

$11.13 per unit and the variable labour cost is $7.29 per unit.

1. What is the variable cost per unit?

2. Suppose the company incurs fixed costs of $875 000 during a year in which total production is 190 000 units. What are the total costs for the year?

3. If the selling price is $44.99 per unit, does the company break even on a cash basis? If depreciation is $435 000 per year, what is the accounting break-even point?