# Steven Newman, Inc., estimates 2012 costs to be as follows: Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 21, Practice Exercises #35

Steven Newman, Inc., estimates 2012 costs to be as follows:

Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$6 per unit

Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$8 per unit

Variable manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .\$5 per unit

Variable selling and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$2 per unit

Fixed expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$80,000

1. Assuming that Newman will sell 50,000 units, what sales price per unit will be needed to achieve a \$75,000 profit?

2. Assuming that Newman decides to sell its product for \$23 per unit, determine the break-even sales volume in dollars and units.

3. Assuming that Newman decides to sell its product for \$23 per unit, determine the number of units it must sell to generate a \$100,000 profit.