The accounting break-even production quantity for a project is 5,799 units.The fixed costs are $92,640,the depreciation is $36,210,and the sales price per unit is $48.29.What is the variable cost per unit?
A)$31.18
B)$27.04
C)$26.07
D)$32.81
E)$33.04

Question

Quizplus · Accepted Answer

To calculate the variable cost per unit, we use the formula for accounting break-even:

Accounting break-even = (Fixed costs + Depreciation) / (Sales price per unit - Variable cost per unit)

Substituting the given values gives us:

5,799 = (92,640 + 36,210) / (48.29 - Variable cost per unit)

Solving for Variable cost per unit:

Variable cost per unit = 26.07

Therefore, the answer is (C) $26.07.

The Accounting Break-Even Production Quantity for a Project Is 5,799