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From the information below, calculate the accounting break-even point. Fixed costs are $ 2500/year. Variable costs:...

From the information below, calculate the accounting break-even point. Fixed costs are $ 2500/year. Variable costs: $ 8/unit. Depreciation: $ 500/year. Price: $ 25/unit. Discount rate: 10%. Project life: 4 years. Tax rate: 34%.

88 units/year.

100 units/year.

120 units/year.

177 units/year.

147 units/year.

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Homework Answers

Answer #1

Total Fixed cost = 2500+500 = 3000

Contribution per unit =price-variable cost

              = 25 -8

             = $ 17 per unit

Accounting break even point = Total fixed cost /contribution per unit

              = 3000 / 17

               = 176.47 (rounded to 177 units)

correct option is "D"

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