Break-Even Analysis

question 26

Multiple Choice

Break-even analysis. Max's Brakes is introducing a new revolutionary brake-pad for vehicles that will never wear out. Max's will sell the pads for $100 a pair, and they will cost $80 in variable costs to produce. If cash fixed expenses are $1,500 per year and the depreciation and amortization expenses are $600 per year, then what is the Accounting Operating Profit Break-Even point for Max's?

• A) 8 pairs
• B) 21 pairs
• C) 75 pairs
• D) 105 pairs

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Definitions:

Vascular Tissue

Plant tissue responsible for the transport of water, nutrients, and sugars throughout the plant body, comprising principally of xylem and phloem.

Stomata

Tiny openings or pores in plant leaves and stems that allow for gas exchange, facilitating photosynthesis and transpiration.

Vascular Cambium

A layer of tissue in plants that is the source of new cells for growth in diameter of stems and roots.

Secondary Growth

This is the process in plants that results in the thickening of stems and roots, mainly due to the activity of the vascular cambium and cork cambium.