Final answer:
The financial break-even point for Quorum Company is when they sell at least 20 units. This calculation is based on their fixed and variable costs, and the sales price per unit, without considering the discount rate or tax rate.
Step-by-step explanation:
The financial break-even point is the level of output at which total revenue equals total costs, including both variable and fixed costs, where the company does not make a profit but also does not incur any losses. To determine this point for Quorum Company, we need to calculate the level of units that need to be sold to cover all costs, using the provided data about the price per unit, variable costs per unit, fixed costs, and other financial information. This does not take into account the discount rate or tax rate, as these do not affect the calculation of the financial break-even point.
Using the formula:
Break-even units = Fixed Costs / (Sales Price per Unit - Variable Cost per Unit),
we can calculate the financial break-even point as follows:
Break-even units = $515,000 / ($44,000 - $18,000) = $515,000 / $26,000 = 19.807 units. Since we cannot have a fraction of a unit, the company would need to sell at least 20 units to reach its financial break-even point.