Question

Hatteras Hatters produces a variety of hats for beachgoers. Hatteras produces hats in batches and currently produces six batches per year. The company’s controller recently implemented an activity-based costing system and would like to calculate break-even sales for the owner under this new costing system. She has prepared the following representative data:
Average hat sales price ............ $ 10.00
Direct materials (per unit) ........... $ 2.50
Direct labor (per unit) ........... $ 1.75
Variable overhead (per unit) ......... $ 0.75
Setup cost (per batch) ............ $ 1,000
Fixed costs (in total) ........... $ 29,000

Required
Calculate the number of hats Hatteras Hatters must sell to break even.



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  • CreatedMarch 11, 2015
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