Question

Consider each of the following cases:

  

Case	Accounting Break-Even	Unit Price	Unit Variable Cost	Fixed Costs	Depreciation
1	109,400	$ 40	$ 25	$ 825,000	?
2	132,000	?	60	2,800,000	$ 1,100,000
3	6,438	100	?	103,000	135,000

   

Required:

(a)	Find the depreciation for Case 1. (Do not round your intermediate calculations.)
	(Click to select)55,000856,800775,200840,480816,000

    

(b)	Find the unit price for Case 2. (Do not round your intermediate calculations.)
	(Click to select)540,60381.2189.5585.07566,346

  

(c)	Find the unit variable cost for Case 3. (Do not round your intermediate calculations.)
	(Click to select)66.1811669.3456.7363.03

Answer 1

a.) $816,000 ,

Accounting break even unit =[ Fixed costs + depreciation] / (unit price - variable cost)

109,400   = [$825,000 + depreciation] / [$40 - $25]

109,400   = [$825,000 + depreciation] / $15

1641000 = $825,000 + depreciation

depreciation = $816000

b.) $89.55 ,

Accounting break even unit =[ Fixed costs + depreciation] / (unit price - variable cost)

132,000 = [2,800,000 + $ 1,100,000 ] / [unit price - 60 ]

  132,000 = $3900000 / [unit price - 60 ]

132,000 unit price - $7920000 = $3900000

132,000 unit price = $11820000

unit price = $89.55

c.) $63.03 ,

Accounting break even unit =[ Fixed costs + depreciation] / (unit price - variable cost)

6,438 = [103,000 + 135,000] / [100 - variable cost]

6,438 = $238000 / [100 - variable cost]

$643800 - 6438 variable cost = $238000

6438 variable cost = $405800

variable cost = $63.03