Question: Andrews has negotiated a new labor contract that will affect the cost of their product Able. Refer to the Production Analysis. Labor costs will go

Andrews has negotiated a new labor contract that will affect the cost of their product Able. Refer to the Production Analysis. Labor costs will go up from $7.49 to $7.99 per unit. Andrews plans to pass on half the labor increase to their customers. Assume all other period and variable costs remain the same. The production report shows the selling price will increase from $28.00 to $28.25. Able's material costs remain the same at $11.59. Assume Able's period costs are identical to Baldwin's product Baker at $5,192 as found on the annual report. How many units of Able would need to be sold next round to break even on the product Able? Hint: BE= Period Costs/(Selling Price Per Unit minusVariable Costs per Unit)

599

450

1050

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