Materials and labor are the only variable costs the company

Reference no: EM13602427

Raron's Rockers is in the process of preparing a production cost budget for August. Actual costs in July for 120 rocking chairs were:

Materials cost $4,800
Labor cost 3,000
Rent 1,500
Depreciation 2,500
Other fixed costs 3,200
Total $15,000

Materials and labor are the only variable costs. The company has estimated that it can increase sales to 150 chairs in August if it changes the selling price of rockers to $145 instead of the current $160 per unit. What is expected to occur to the cost per unit given the expected changes?

Reference no: EM13602427

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