In each of the following cases, calculate the accounting break-even and the cash
ID: 2736056 • 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
Answer: Accounting Breakeven point:
QA = (FC + D)/(P – v)
Where
FC=Fixed costs
P=Price
V=Variable cost
Case 1:
QA=(9,060,000+3400000)/(3040-2455)
=21299.14
Case 2:
QA=(67000+240000)/(91-59)
=9593.75
Case 3:
QA=(2600+960)/(20-5)
=237.33
Cash Breakeven Point:
QC = FC/(P – v)
Case 1:
QC=(9,060,000)/(3040-2455)
=15487.18
Case 2:
QC=(67000)/(91-59)
=2093.75
Case 3:
QC=(2600)/(20-5)
=173.33
Case Accounting break-even Cash break-even 1 21299.14 15487.18 2 9593.75 2093.75 3 237.33 173.33Related Questions
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