Artesa, a leading firm in the semiconductor industry, produces digital integrated circuits (ICs) for the communications and defense markets. For the year ended December 31, 2020, Artesa sold 242,400 ICs at an average selling price of $47 per unit. The following information also relates to 2020 (assume constant unit costs and no variances of any kind):

Required

1. How many integrated circuits did Artesa produce in 2020?
2. Calculate the breakeven point (number of ICs sold) in 2020 under:
a. Variable costing
b. Absorption costing
3. Due to difficulties in obtaining high-quality silicon, Artesa expects that direct materials costs will increase to $15 per IC in 2021. Assuming all other data are the same, calculate the minimum number of  ICs Artesa must sell in 2021 to break even under:
a. Variable costing
b. Absorption costing

Transcribed Image Text:

Inventory, January 1, 2020: Inventory, December 31, 2020: Fixed manufacturing costs: Fixed administrative costs: Direct materials costs: Direct labor costs: $1,876,800 $3,284,400 $ 6959 32,600 ICs 24,800 ICs 13 per IC 11 per IC