A client has recently leased manufacturing facilities for production of a new product. Based on studies made by the staff, the following data have been made available to you (estimated annual sales 24,000 units):: pg56

Transcribed Image Text:

Amount Per unit Estimated costs: Materials Direct labor Overhead $ 96,000 $4.00 .60 1.00 1.20 E 11 14,400 24,000 28,800 Administrative expense Total $163,200 $6.80 Selling expenses are expected to be 15% of sales, and profit is to amount to $1.02 per unit. Required: a Compute the selling price per unit. b Project a profit and loss statement for the year (ignore income taxes). c Compute a break-even point expressed in dollars and in units, assuming that overhead and administrative expenses are fixed but that other costs are fully variable. (AICPA Adapted.)