Assume a project with a life of one year has projected depreciation of $720,fixed costs of $6,000,and total sales of $11,760 at a sales quantity of 300 units.The variable cost per unit is $17.40.What is the accounting break-even level of production?
A)309 units
B)301 units
C)292 units
D)298 units
E)312 units

Question

Quizplus · Accepted Answer

The accounting break-even level of production is the point at which total costs equal total revenues. To calculate this, we can use the following formula:Break-even point = Fixed costs / (Sales price per unit - Variable cost per unit)Plugging in the given values, we get:Break-even point = $6,000 / ($11,760 / 300 - $17.40) = 309 units

Assume a Project with a Life of One Year Has