Question

A project has a contribution margin per unit (i.e. profit per unit) of $12.5, fixed costs...

A project has a contribution margin per unit (i.e. profit per unit) of $12.5, fixed costs of $67,850, depreciation of $14,450, variable costs per unit of $14.5, and a financial break-even point of 15,620 units. What is the operating cash flow at this level of output, assuming we ignore tax?

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Answer #1
Answer:
Operating cash flow at this level of output
                =   (Contribution margin per unit x Financial break-even point ) (-) Fixed Cost
                =   ( $ 12.5 x 15,620 Units ) (-) $ 67,850
                =      $ 195,250 (-) $ 67,850
                =    $ 127,400
Operating cash flow at this level of output =    $ 127,400
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