The accounting break-even production quantity for a project is 12,320 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)$644,800
C)$748,500
D)$1,080,000
E)$1,629,600

Question

Quizplus · Accepted Answer

Depreciation_{accounting break-even} = (12,320 × $28) - $216,000 = $128,960Fixed asset cost = $128,960 × 5 = $644,800

The Accounting Break-Even Production Quantity for a Project Is 12,320