In each of the following cases, calculate the accounting break-even and the cash
ID: 2616997 • Letter: I
Question
In each of the following cases, calculate the accounting break-even and the cash break-even points. Ignore any tax effects in calculating the cash break-even. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)
In each of the following cases, calculate the accounting break-even and the cash break-even points. Ignore any tax effects in calculating the cash break-even. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)
Explanation / Answer
Case
Accounting Break - Even Point
Cash Break - Even Point
1
19,412.84 Units
14,715.6 Units
2
13,300 Units
3,300 Units
3
250.83 Units
183.33 Units
Accounting Break - Even Point = [Fixed costs + Depreciation ] / [Unit selling Price – Variable cost ]
Cash Break - Even Point = Fixed costs / [ Unit selling Price – Variable cost ]
CASE - 1
Accounting Break - Even Point
= [ $80,20,000 + 25,60,000 ] / [ $2,920 – 2,375 ]
= 19,412.84 Units
Cash Break - Even Point
= $80,20,000 / [ $2,920 – 2,375 ]
= 14,715.6 Units
CASE - 2
Accounting Break - Even Point
= [ $66,000 + 200,000 ] / [ $71 - 51]
= 13,300 Units
Cash Break - Even Point
= $66,000 / [ $71 - 51]
= 3,300 Units
CASE - 3
Accounting Break - Even Point
= [ $2,200 + 810 ] / [ $16 - 4 ]
= 250.83 Units
Cash Break - Even Point
= $2,200 / [ $16 - 4 ]
= 183.33 Units
Case
Accounting Break - Even Point
Cash Break - Even Point
1
19,412.84 Units
14,715.6 Units
2
13,300 Units
3,300 Units
3
250.83 Units
183.33 Units
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