Answer:
Accounting Break-Even
Case 1 = $14,350 Case 2 = $8,485.71 Case 3 = $214.375
Cash Break-Even
Case 1 = $11,766.67 Case 2 = $1342.86 Case 3 = $168.75
Explanation:
According to the scenario, computation of the given data are as follow:-
Accounting Break-Even = (Fixed Cost + Depreciation Cost) ÷ (Price Unit -Variable Unit)
Case 1 - ($7,060,000 + $1,550,000) ÷ ($3075 - $2,475)
= $8,610,000 ÷ $600
= $14,350
Case 2 - ( $47,000 + $250,000) ÷ ($96 - $61)
= $297,000 ÷ 35 = $8,485.71
Case 3 - ($2,700 + $730) ÷ ($21 - $5)
= $3,430 ÷ $16 = $214.375
Cash Break Even = Fixed Cost ÷ (Price Unit - Variable Unit)
Case 1 - $7,060,000 ÷ ($3075 - $2,475)
= $7,060,000 ÷ $600
= $11,766.67
Case 2 - $47,000 ÷ ($96 - $61)
= $47,000 ÷ $35 = $1342.86
Case 3 - $2,700 ÷ ($21 - $5)
= $2,700 ÷ $16 = $168.75
