Managerial accounting : Calculation of cash break-even quantity

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					              Sub: Accounts                                                          Topic: Managerial Accounting



              Question:
              Calculation of cash break-even quantity and financial break-even quantity.

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              In each of the following cases, find the unknown variable:

               Accounting Break-Even Unit Price Unit Variable Cost Fixed Costs Depreciation
              127,500                         $41            $30                       $820,000       ?
              135,000                         ?              43                        3,200,000      $1,150,000
              5,478                           98             ?                         160,000        105,000


               A project has the following estimated data: price=$68 per unit; variable costs=$41 per unit:
              fixed costs=$8,000; required return=15 percent; initial investment=$12,000; life=four years.
              Ignoring the effect of taxes, what is the accounting break-even quantity? The cash break-even
              quantity? The financial break-even quantity? What is the degree of operating leverage at the
              financial break-even level of output?
               Consider a project with the following data: accounting break-even quantity=17,000 units; cash
              break-even quantity=12,000 units; life=five years; fixed costs=$130,000; variable costs=$23 per
              unit; required return=16 percent. Ignoring the effect of taxes, find the financial break-even
              quantity

              Solution:
               Unit p
				
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Description: Calculation of cash break-even quantity and financial break-even quantity. : A project has the following estimated data: price=$68 per unit; variable costs=$41 per unit: fixed costs=$8,000; required return=15 percent;
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