Consider the following cases Unit Variable Cost $5,040 Case Unit Price 7,000 39

Question

Consider the following cases Unit Variable Cost $5,040 Case Unit Price 7,000 39 12 Fixed Costs 10,000,000 10,000 1,100 Depreciation $ 3,800,000 16,000 770 2 25.35 4.92 Ignore any tax effects in calculating the cash break-even. Requirement 1 (a) Calculate the cash break-even point of Case 1. (Do not round your intermediate calculations.) (Click to select) (b) Calculate the accounting break-even point of Case 1. (Do not round your intermediate calculations.) (Click to select) Requirement 2 (a) Calculate the cash break-even point of Case 2. (Do not round your intermediate calculations.) (Click to select) (b) Calculate the accounting break-even point of Case 2. (Do not round your intermediate calculations.) (Click to select) Requirement 3 (a) Calculate the cash break-even point of Case 3. (Do not round your intermediate calculations.) (Click to select) (b) Calculate the accounting break-even point of Case 3. (Do not round your intermediate calculations.) (Click to select)

Explanation / Answer

Case Accounting breakeven=(Fixed costs+Depreciation)/(Sales-Variable costs) Cash breakeven=(Fixed costs)/(Sales-Variable costs) 1 (10,000,000+3,800,000)/(7000-5040)=7040.82 10,000,000/(7000-5040)=5102.04 2 (10000+16000)/(39-25.35)=1904.76 10000/(39-25.35)=732.60 3 (1100+770)/(12-4.92)=264.12 1100/(12-4.92)=155.37

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