A project has an accounting break-even point of 2,000 units.The ﬁxed costs are £4,200 and the depreciation expense is £400.The projected variable cost per unit is £23.10.What is the projected
Sales price?

Question

Quizplus · Accepted Answer

The accounting break-even point is where total revenue equals total costs (including both fixed and variable costs). To find the sales price, we use the formula: Sales Price = (Fixed Costs + Depreciation + (Variable Cost per Unit * Break-even Quantity)) / Break-even Quantity. Plugging in the given values: Sales Price = (£4,200 + £400 + (£23.10 * 2,000)) / 2,000 = £25.40.

A Project Has an Accounting Break-Even Point of 2,000 Units