Question: Sutton Hot Dog Stand sells hot dogs for $1.35. Variable costs are $1.05 per unit with fixed production costs of $90,000 per month at a

Sutton Hot Dog Stand sells hot dogs for $1.35. Variable costs are $1.05 per unit with fixed

production costs of $90,000 per month at a level of 400,000 units. Fixed administrative

costs total $30,000. Sales average 400,000 units per month, with planned production of

400,000 hot dogs.

Required:

a. What are breakeven unit sales under variable costing?

b. What are breakeven unit sales under absorption costing if she sells everything she

prepares?

c. What are breakeven unit sales under absorption costing if average sales are 498,000

and planned production is changed to 500,000?

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