Break-Even Analysis

question 24

Multiple Choice

Break-even analysis. Poisson Calculators has found that it is indifferent between purchasing a high-capacity vacuum component assembly machine or a lower capacity machine as long as sales are 1,900 units per month. The price of each calculator is $70. The high-capacity machine has cash expenses of $100,000 per month and depreciation and amortization expenses of $30,000 per month, while the alternative has cash expenses of $30,000 per month and depreciation and amortization expenses of $5,000 per month. Under the low-capacity alternative, variable costs per unit are $60. If the firm bases its decisions on the Accounting Operating Profit Break-even, then what is the variable cost per unit under the high-capacity alternative?

• A) $10
• B) $47
• C) $60
• D) $70

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Definitions:

Hepatic Portal System

A system of veins that carries nutrient-rich blood from the gastrointestinal organs to the liver for processing.

External Iliac Vein

A large vein in the pelvic region that carries deoxygenated blood from the lower limbs back to the heart.

Liver Sinusoid

Specialized, capillary-like blood vessels in the liver involved in the filtration and exchange of substances between the blood and liver cells.

Hepatic Portal System

A system of veins that carries nutrient-rich blood from the digestive organs to the liver for detoxification and metabolism before it enters the general circulation.