The Accounting Break-Even Production Quantity for a Project Is 12,320

question 66

Multiple Choice

The accounting break-even production quantity for a project is 12,320 units.The fixed costs are $216,000 and the contribution margin per unit is $28.The fixed assets required for the project will be depreciated on straight-line basis to zero over the project's 5-year life.What is the amount of fixed assets required for this project?

• A)$325,920
• B)$644,800
• C)$748,500
• D)$1,080,000
• E)$1,629,600

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Definitions:

Transactions in Goods

Commercial exchanges involving the sale and purchase of physical products, as opposed to services or digital goods.

UCC

The Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States, intended to standardize and simplify the laws across the states.

Ex-Ship

A term used in international trade, indicating that the seller is responsible for delivering goods to a designated port of arrival and covering all costs until the goods are offloaded from the ship.

Risk of Loss

A legal term referring to who bears the financial burden if goods are damaged or lost during a transaction or shipment.