The Marx Brewing Company Recently Installed a New Bottling Machine

question 14

Essay

The Marx Brewing Company recently installed a new bottling machine. The machine's initial cost is $2,000, and can be depreciated on a straight line basis to a zero salvage in 5 years. The machine's per year fixed cost is $1,800, and its variable cost is $0.50 per unit. The selling price per unit is $1.50. Marx's tax rate is 34%, and it uses a 16% discount rate. Calculate the accounting break-even point on the new machine, as well as the present value break-even point on the new machine.

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Definitions:

CISG

The United Nations Convention on Contracts for the International Sale of Goods, a treaty that establishes a uniform international sales law.

Contract Of Sales

A legal agreement between a buyer and a seller for the exchange of goods, services, or property for payment or promise of payment.

Merchant

An individual or business engaged in the selling of goods, especially on a large scale or with specialized knowledge.

Occupation

A person's principal job or business, especially as a means of earning a living.