Under absorption costing, a company had the following per unit costs when 10,000 units were produced. Direct labor $ 2 Direct materials Variable overhead Total variable cost Fixed overhead ($50,000/10,000 units) 4. 9 Total product cost per unit $14 The company sells its product for $50 per unit. Due to new regulations, the company must now incur $2 per unit of hazardous waste disposal costs and $8,500 per year of fixed hazardous waste disposal costs. Compute the company's break-even point (in units), including hazardous waste disposal costs. Break-even point 13 units

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Under absorption costing, a company had the following per unit costs when 10,000 units were produced.
Direct labor
$ 2
Direct materials
3
Variable overhead
4
Total variable cost
Fixed overhead ($50,000/10,000 units)
Total product cost per unit
$14
The company sells its product for $50 per unit. Due to new regulations, the company must now incur $2 per unit of hazardous waste
disposal costs and $8,500 per year of fixed hazardous waste disposal costs.
Compute the company's break-even point (in units), including hazardous waste disposal costs.
Break-even point
13 units
95
Transcribed Image Text:Under absorption costing, a company had the following per unit costs when 10,000 units were produced. Direct labor $ 2 Direct materials 3 Variable overhead 4 Total variable cost Fixed overhead ($50,000/10,000 units) Total product cost per unit $14 The company sells its product for $50 per unit. Due to new regulations, the company must now incur $2 per unit of hazardous waste disposal costs and $8,500 per year of fixed hazardous waste disposal costs. Compute the company's break-even point (in units), including hazardous waste disposal costs. Break-even point 13 units 95
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