The accounting break-even production quantity for a project is 11,640 units. The fixed costs are $216,000 and the contribution margin per unit is $28. The fixed assets required for the project will be depreciated on straight-line basis to zero over the project's 5-year life. What is the amount of fixed assets required for this project?
A)$325,920
B)$549,600
C)$748,500
D)$1,080,000
E)$1,629,600

Question

Quizplus · Accepted Answer

Depreciation_{accounting break-even} = (11,640 F1F1F1S1F1F1F10 $28) - $216,000 = $109,920Fixed asset cost = $109,920 F1F1F1S1F1F1F10 5 = $549,600

The Accounting Break-Even Production Quantity for a Project Is 11,640