Chester has negotiated a new labor contract for the next round that will affect the cost for their product Cozy. Labor costs will go from $2.90 to $3.40 per unit. Assume all period and variable costs as reported on Chester's Income Statement remain the same.

If Chester were to pass on half the new labor costs to their customers, how many units of product Cozy would need to be sold next round to break even on the product?

1,980

1,404

1,525

1,462

e COMP-XM INQUIRER Mozilla Firefox www2.capsim.com/ogi-bin/cpcGIReports2011.exe?xM &studentkey 1357331&simidac59559&Round 7&Report ourier Ann Report Annual Report Chester C59559 Dec. 31, 201 2018 Income Statement 2018 Co Product N $30,098 $31,628 $40.13 $44,700 $146,485 00.0% iable Costs S5.455 55.074 S7.790 $8.572 S27.49 Direct Material $13.220 $14,165 $18,7e5 $19.828 43.7% tory Cary S354 $430 $587 $1.927 $93.295 82.8% Total Variable $19,020 $20,209 $25. $29.988 S15,714 $10,021 S53,070 Margi Period Costs 34,907 55,307 S3,107 $3800 S17.240 SG&A R&D $1,000 00 $2.000 S1.250 S1.250 S1.250 $1.250 $5.000 $1,400 $1,400 00 $5.000 3.4% S287 $383 $1.397 Total Period $8,844 $9,317 $5,899 $8,678 S20.637 20.9% Net Margi $2,223 $1,951 $9.12 $9,138 S22.432. 5.3% ist pri Direct Labor: Labor oacts incurred to prod the product that was sold. Inventory carry cost the cost to carry unsold goods in inventory other $0.570 Depreciation calculated on straightline 5-year depreciation of Plant value. R&D costs: EBIT $15,863 0.8% $3,840 2.0% &D departme penditures for ch product. Admi Gstimated at 1.o% of sales. Promotions: The promotion budget for each product. sales: Long Term Interest $12,908 8.8% S30s) force budget for each product other charges not induded Profit Sharing 0.0% ees, Write Otta, and TOM. The fees ey paid to (S574 ng fees you ight clude the loca yo experienoe when you pacity quidate Variable Margins of eliminating a production negati 2008 Cheste nt, the y made money the liquidat pacity tory EBIT ngs Before Interest and T Short Te interest: Interest expense based 30.0% cluding short term debt, long term notes that ha 20.0% Long Term Interest terest paid utstanding bonds. based upon mployees und 0.0% tract. Net Profit EBIT est, taxes, d profit sh 0.0% Highlight A Match Case Whole Words 3 of 14 matches Ask me anything 2.41 PM e COMP-XM INQUIRER Mozilla Firefox www2.capsim.com/ogi-bin/cpcGIReports2011.exe?xM &studentkey 1357331&simidac59559&Round 7&Report ourier Ann Report Annual Report Chester C59559 Dec. 31, 201 2018 Income Statement 2018 Co Product N $30,098 $31,628 $40.13 $44,700 $146,485 00.0% iable Costs S5.455 55.074 S7.790 $8.572 S27.49 Direct Material $13.220 $14,165 $18,7e5 $19.828 43.7% tory Cary S354 $430 $587 $1.927 $93.295 82.8% Total Variable $19,020 $20,209 $25. $29.988 S15,714 $10,021 S53,070 Margi Period Costs 34,907 55,307 S3,107 $3800 S17.240 SG&A R&D $1,000 00 $2.000 S1.250 S1.250 S1.250 $1.250 $5.000 $1,400 $1,400 00 $5.000 3.4% S287 $383 $1.397 Total Period $8,844 $9,317 $5,899 $8,678 S20.637 20.9% Net Margi $2,223 $1,951 $9.12 $9,138 S22.432. 5.3% ist pri Direct Labor: Labor oacts incurred to prod the product that was sold. Inventory carry cost the cost to carry unsold goods in inventory other $0.570 Depreciation calculated on straightline 5-year depreciation of Plant value. R&D costs: EBIT $15,863 0.8% $3,840 2.0% &D departme penditures for ch product. Admi Gstimated at 1.o% of sales. Promotions: The promotion budget for each product. sales: Long Term Interest $12,908 8.8% S30s) force budget for each product other charges not induded Profit Sharing 0.0% ees, Write Otta, and TOM. The fees ey paid to (S574 ng fees you ight clude the loca yo experienoe when you pacity quidate Variable Margins of eliminating a production negati 2008 Cheste nt, the y made money the liquidat pacity tory EBIT ngs Before Interest and T Short Te interest: Interest expense based 30.0% cluding short term debt, long term notes that ha 20.0% Long Term Interest terest paid utstanding bonds. based upon mployees und 0.0% tract. Net Profit EBIT est, taxes, d profit sh 0.0% Highlight A Match Case Whole Words 3 of 14 matches Ask me anything 2.41 PM