Rita's Flowers has gathered this information on a project:
Initial investment: $12,000
Fixed costs $2,280
Variable costs: $6.20 per unit
Selling price: $22 per unit
Discount rate: 12 percent
Project life: 3 years
Tax rate: 34 percent
Fixed assets are depreciated using straight-line depreciation over the project's life.What is the accounting break-even point?

Question

Quizplus · Accepted Answer

Accounting break-even point = {[$2,280 + ($12,000/3)] × (1 - .34)}/[($22 - 6.20)× (1 - .34)] 397.47 = units

Rita's Flowers Has Gathered This Information on a Project