Modern Artifacts Can Produce Keepsakes That Will Be Sold for $80

question 78

Essay

Modern Artifacts can produce keepsakes that will be sold for $80 each.Nondepreciation fixed costs are $1,000 per year and variable costs are $60 per unit.If the project requires an initial investment of $3,000 and is expected to last for 5 years and the firm pays no taxes,what are the accounting and economic break-even levels of sales? The initial investment will be depreciated straight-line over 5 years to a final value of zero,and the discount rate is 10%.

---

Definitions:

Journal Entry

A record of a financial transaction in the accounting books.

Trial Balance

A bookkeeping worksheet where the balances of all ledgers are compiled into debit and credit account columns to check the accuracy of the financial transactions recorded.

Reference Column

A column in a table or spreadsheet used to hold information or data that aids in categorization or identification.

General Journal

A ledger in which all transactions are initially recorded, dated, and described.