A company is considering a project with a cash break-even point of 14,500 units. The selling price is $14 a unit and the variable cost per unit is $8. What is the projected amount of ﬁxed costs?
A) $87,000
B) $94,000
C) $109,000
D) $116,000
E) $203,000

Question

Quizplus · Accepted Answer

The cash break-even point is calculated as Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Given the break-even point of 14,500 units, selling price of $14, and variable cost of $8, the fixed costs are 14,500 * ($14 - $8) = $87,000.

A Company Is Considering a Project with a Cash Break-Even