In each of the following cases, calculate the accounting break-even and the cash
ID: 2712466 • 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. (Round your answers to 2 decimal places. (e.g., 32.16))
Case
Unit Price
Unit Variable Cost
Fixed Costs
Depreciation
1
$
2,950
$
2,395
$
9,040,000
$
3,300,000
2
76
53
46,000
210,000
3
17
5
2,300
950
Case
Unit Price
Unit Variable Cost
Fixed Costs
Depreciation
1
$
2,950
$
2,395
$
9,040,000
$
3,300,000
2
76
53
46,000
210,000
3
17
5
2,300
950
Explanation / Answer
Answer: Accounting BEP (Q)=(Fixed costs + Depreciation)/(Price per unit - Variable cost per unit)
Case1 =($9040000+$3300000)/($2950-$2395)
=$12340000/$555
=22234.234 units
Case 2=($46000+$210000)/($76-$53)
=$256000/$23
=11130.434 units
Case 3=($2300+$950)/($17-$5)
=3250/12
=270.8333 units
Cash Break-Even=Fixed cost/(Selling price-Variable cost)
Case1 =($9040000)/($2950-$2395)
=$9040000/$555
=16288.29 units
Case 2=($46000)/($76-$53)
=$46000/$23
=2000 units
Case 3=($2300)/($17-$5)
=2300/12
=191.67 units
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