Question

you are considering a new project. the project has projected depreciation of $720 fixed costs of 6000. The sales price/unit is 9.80 and the variable cost/unit is 4.20 what is the accounting break-even point

Answer 1

Break-even point in units= 1,200 units

Step-by-step explanation:

Giving the following information:

Total fixed costs= 6,000 + 720= 6,720

Unitary varaible cost= $4.2

Selling price= $9.8

Because it is the accountant break-even point, we need to include the depreciation expense.

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 6,720 / (9.8 - 4.2)

Break-even point in units= 1,200 units