Question

In: Finance

You are considering investment in a brand new asset. The annual fixed costs associated with the...

You are considering investment in a brand new asset. The annual fixed costs associated with the asset are expected to be $435,000 and the annual depreciation expense is expected to be $188,000. If the selling price is expected to be $22 per unit and the variable cost is expected to be $15 per unit, what is the accounting breakeven level of units?

a. 62,143
b. 89,000
c. 35,286
d. 28,319
e. There is not enough information to answer the question.

Solutions

Expert Solution

Accounting breakeven=(Fixed cost+Depreciation)/(Sales-Variable cost)

=(435,000+188,000)/(22-15)

which is equal to

=89000 units

jeff jeffy answered 2 years ago
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