A Company Is Considering a Project with a Cash Break-Even

question 5

Multiple Choice

A company is considering a project with a cash break-even point of 22,600 units.The selling price is $28 a unit,the variable cost per unit is $13,and depreciation is $14,000.What is the projected amount of fixed costs?

• A)$325,000
• B)$339,000
• C)$342,000
• D)$348,000
• E)$353,000

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Definitions:

Conversion Costs

Costs incurred in the process of converting raw materials into finished goods, typically including direct labor and manufacturing overhead.

Conversion Costs

The combined cost of direct labor and manufacturing overhead involved in transforming materials into finished goods.

Equivalent Units

A concept in cost accounting used to calculate the number of complete units that could have been produced given the total amount of raw materials and effort expended.

Total Materials Costs

The sum of all costs associated with the materials required to manufacture a product.