Hurricane Safe produces an LED rechargeable flashlight torch that it sells online through various websites. It has the following cost structure.

*Fixed cost at 100,000 units per year
Required:
a. If the flashlight torch sells for $50, how many torches must Hurricane sell each year to break even?
b. Hurricane Safe had no inventory of torches at the beginning of the year but had 1,000 torches at the end of the year. Hurricane Safe uses variable costing to value ending inventories. What is Hurricane Safe's ending inventory value of torches?

Total Variable Fixed Cost* Cost Cost $2.20 1.70 $ 2.70 1.25 4.50 11.00 5.50 0.90 $25.85 $ 4.90 2.95 4.50 11.00 Advertising Distribution Direct labor Direct material Manufacturing overhead 4.20 1.20 9.70 2.10 Selling Total cost $9.30 $35.15