Question
Can you help with the following question? Chester has negotiated a new labor contract for the next round that will affect the cost for their
Can you help with the following question?
Chester has negotiated a new labor contract for the next round that will affect the cost for their product Cat. Labor costs will go from $7.91 to $8.51 per unit. Assume all period and other variable costs remain the same. If Chester were to absorb the new labor costs without passing them on in the form of higher prices, how many units of product Cat would need to be sold next round to break even on the product?
Data Provided:
Sales 61,128
Variable Costs:
Labor 14,240 Materials 23,397 Total Variable 37,638
Total Period cost 6,573
Selling price $34 Unit Sold 1798
A. 542 B. 1893 C. 529 C 556
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