1. The cost structure of a new firm Atelier GD in Alsancak is given below. The firm produces artwork with a yearly capacity of 5000 labor hours. 50 labor hours is required to produce one unit of artwork on average.

Cost Item

Amount

Raw Material (per unit)

150 $

Labor Force (per hour)

10 $

Rent for the building (per year)

25000 $

Administrative Expenses (per year)

20000 $

Profit Margin

% 25

a. Calculate the unit price according to full cost pricing method. (5 pts)

b. Calculate the unit price according to direct cost pricing method. (5 pts)

c. Calculate the break-even price assuming the firm produces 100 units per year. (5 pts)

d. Calculate the break-even quantity assuming the unit price is 1212,5 $ (profit margin not included) (5 pts)