Your company is considering a new project with estimated depreciation of $630, ﬁxed costs of $5,000, and total sales of $10,050. The variable cost per unit is estimated at $3.75. What is the
Accounting break-even level of production?
A) 1,100 units
B) 1,179 units
C) 1,216 units
D) 1,298 units
E) 1,347 units

Question

Quizplus · Accepted Answer

The accounting break-even point is calculated as (Fixed Costs + Depreciation) / (Sales price per unit - Variable cost per unit). Here, the sales price per unit is $10,050 / units, which needs to be calculated. Then, solve for the break-even point.

Your Company Is Considering a New Project with Estimated Depreciation