For a particular product,Sandbarr Corporation has operating fixed costs of $30,000,of which depreciation of $15,000 is the only non-cash outlay.The unit sale price is $4.20 per unit and variable costs are $2.20 per unit.What is the operating cash breakeven point in units for Sandbarr?

Question

Quizplus · Accepted Answer

The operating cash breakeven point is calculated by dividing the cash fixed costs by the contribution margin per unit. Cash fixed costs are $15,000 ($30,000 total fixed costs minus $15,000 depreciation). The contribution margin per unit is $2.00 ($4.20 sale price minus $2.20 variable cost). Thus, the breakeven point is $15,000 / $2.00 = 7,500 units.

For a Particular Product,Sandbarr Corporation Has Operating Fixed Costs of $30,000,of