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?
Depreciationaccounting break-even = (12,320 × $28) - $216,000 = $128,960
Fixed asset cost = $128,960 × 5 = $644,800 |
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A project has an accounting break-even point of 15,329 units. The fixed costs are $382,000 and the projected variable cost per unit is $29.10. The project will require $780,000 for fixed assets which will be depreciated straight-line to zero over the project's 6-year life. What is the projected sales price per unit?
15,329 = [$382,000 + ($780,000/6)]/(P - $29.10); P = $62.50
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79.
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A proposed project has fixed costs of $9,800, depreciation expense of $2,550, and a sales quantity of 2,100 units. The total variable costs are $5,607. What is the contribution margin per unit if the projected level of sales is the accounting break-even point?
Contribution margin = ($9,800 + $2,550)/2,100 = $5.88
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