Airedale Air-Craft, Inc. makes model airplanes. Each plane produced can be sold to a distributor for $54. The variable cost of producing each unit is $31. The company's cash-based fixed costs (such as managers' salaries, building rent, some components of insurance) total $1,300,000 per year. The machinery used in the manufacturing originally cost the company $4,200,000, and was expected to have a 7-year useful life. Airedale's managers feel that the weighted average cost of capital for a project of this type would be 9.3% per year. What number of units sold constitutes the company's annual Operating (also called Accounting) Break- Even Point?

practice work for an upcoming test