15-8. Break-even analysis assumes linear revenue and cost functions. In reality, these linear functions over large output

15-8. Break-even analysis assumes linear revenue and cost functions. In reality, these linearı

functions over large output and sales levels are highly improbable. Why?ı

vST-!. (Break-even point) You are a hard-working analyst in the office of financial operations for amanufacturing finn that produces a single product. You have developed the following cost structure infonnation for this company. All of it pertains to an output level of 10 million units.
Using this infonnation, find the break-even point in units of output for the finn.

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Return on operating assets Operating asset turnover Operating assets Degree of operating leverage = 30% -6 times = $20 million = 4.5 times