Calculating Costs and Break-Even Rolling Stone (RS) quarries quartz. The variable materials cost is 2.28 per unit,

Question:

Calculating Costs and Break-Even Rolling Stone (RS)

quarries quartz. The variable materials cost is €2.28 per unit, and the variable labour cost is €5.12 per unit.

(a) What is the variable cost per unit?

(b) Suppose RS incurs fixed costs of €500,000 during a year in which total production is 300,000 units. What are the total costs for the year?

(c) If the selling price is €25 per unit, does RS break even on a cash basis? If depreciation is €200,000 per year, what is the accounting break-even point?

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