Question
(Break-even analysis) Project Accounting Break-Even Point (in units) Price per Unit Variable Cost per Unit Fixed Costs Depreciation A 6, 230 $52 $102,000 $26,000 B
(Break-even analysis)
| Project | Accounting Break-Even Point (in units) | Price per Unit | Variable Cost per Unit | Fixed Costs | Depreciation | |||
| A | 6, 230 | $52 | $102,000 | $26,000 | ||||
| B | 760 | $1,000 | $499,000 | $103,000 | ||||
| C | 1,970 | $25 | $13 | $5,000 | ||||
| D | 1,970 | $25 | $7 | $17,000 | ||||
a.Calculate the missing information for each of the above projects.
b.Note that Projects C and D share the same accounting break-even. If sales are above the break-even point, which project would you prefer? Explain why.
c.Calculate the cash break-even for each of the above projects. What do the differences in accounting and cash break-even tell you about the four projects?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started