A project has an accounting break-even point of 41,400 units. The fixed costs are $198,634 and the depreciation expense is $21,200. The projected variable cost per unit is $41.50. What is the projected sales price?
A) $37.07
B) $41.41
C) $42.19
D) $46.81
E) $54.28

Question

Quizplus · Accepted Answer

To find the projected sales price, use the break-even formula: Fixed Costs + Depreciation = (Sales Price - Variable Cost) * Break-even Units. Plug in the values: $198,634 + $21,200 = (Sales Price - $41.50) * 41,400. Solving for Sales Price gives $46.81.

A Project Has an Accounting Break-Even Point of 41,400 Units