Break-even analysis}

The production of a new product required Stupak Manufacturing Company to lease additional plant facilities. Based on studies, the following data have been made available:

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Estimated annual sales-24,000 units Estimated costs: Materials Direct labor Factory overhead Administrative expense Total Amount Per Unit $ 96,000 $4.00 14,400 0.60 24,000 1.00 28,800 1.20 $163,200 $6.80 Selling expenses are expected to be 10% of sales, and net income should be $1.50 per unit. Required: 1. Calculate the selling price per unit. (Hint: Let X equal the selling price and express selling expense as a percent of X.) 2. Prepare an absorption costing income statement for the year. 3. Calculate the break-even point expressed in dollars and in units, assuming that administrative expense and factory overhead are all fixed but other costs are fully variable.