Sutton Hot Dog Stands sells hot dogs at ballparks across Canada 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 break-even unit sales under variable costing?
b. What are break-even unit sales under absorption costing if she sells everything she prepares?
c. What are break-even unit sales under absorption costing if average sales are 498,000 and planned production is changed to 500,000?

Question

Quizplus · Accepted Answer

The Answer of Sutton Hot Dog Stands sells hot dogs at ballparks across Canada 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 break-even unit sales under variable costing?
b. What are break-even unit sales under absorption costing if she sells everything she prepares?
c. What are break-even unit sales under absorption costing if average sales are 498,000 and planned production is changed to 500,000?

Sutton Hot Dog Stands Sells Hot Dogs at Ballparks Across