Expert Answers

Given the following information:

Project Acct Break-even Pt (in units) Price per unit Variable cost F/C Depreciation

A 6,210 ? $53 $103,000 $25,000

B 740 $1,050 ? $495,000 $101,000

C 2,000 $ 21 $13 $4,700 ?

D 2,000 $ 21 $8 ? $14,000

a. Calculate the missing information for each of the above projects. 

b. Note that Projects C and D share the same accounting break-even. If sales are above the break-even point, which project would you prefer? Explain why.

c. Calculate the cash break-even for each of the above projects. What do the differences in accounting and cash break-even tell you about the four projects?