Question
Material Cost:6.82 Labor Cost:$1.78 Price: 17 Variable Cost Direct labor: $1,988 Direct Material: $6,394 Inventory Carry: $190 Total Variable: $8,572 Period Cost Depreciation: $3,833 SG&A:
Material Cost:6.82
Labor Cost:$1.78
Price: 17
Variable Cost
Direct labor: $1,988
Direct Material: $6,394
Inventory Carry: $190
Total Variable: $8,572
Period Cost
Depreciation: $3,833
SG&A: R&D: $983
Promotions: $1,140
Sales: $1,000
Admin:$ 203
Total Period: $7,160
Company E has negotiated a new labor contract for the next round that will affect the cost for their product Easter. Labor costs will go from $1.78 to $2.28 per unit. Assume all period and variable costs as reported on Company E's Income Statement remain the same. If Company E were to pass on half the new labor costs to their customers, how many units of product Easter would need to be sold next round to break even on the product?
a:878
b:852
c:1119
d:906
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