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:

Haircuts

Often used as an example in economics, referring to a service that cannot be stored, saved, or inventoried, and must be consumed at the point of production.

MRP

Material Requirements Planning, a planning and inventory control system used to manage manufacturing processes.

Purely Competitive

A market structure characterized by many buyers and sellers, where each seller offers a homogeneous product and no single buyer or seller can influence the market price.

Labor Demand Schedule

A table or graph showing the quantity of labor that employers are willing to hire at different wage rates.