The accounting break-even production quantity for a project is 6,208 units. The ﬁxed costs are $27,400 and the contribution margin is $5.20. What is the projected depreciation expense?
A) $4,413.66
B) $4,881.60
C) $5,002.50
D) $5,087.30
E) $5,133.33

Question

Quizplus · Accepted Answer

The accounting break-even point is calculated as (Fixed Costs + Depreciation) / Contribution Margin. Solving for Depreciation: 6,208 = ($27,400 + Depreciation) / $5.20. Depreciation = $4,881.60.

The Accounting Break-Even Production Quantity for a Project Is 6,208