Problema Solution
If TechCor has fixed costs of $60,000, variable costs of $1.20/unit, sales price/unit of $7, and depreciation expense of $25,000, what is their cash breakeven in units?
Answer provided by our tutors
Fixed Cost = $60,000
Depreciation = $25,000
Selling Price per Unit = $7 per unit
Variable Cost per Unit = $1.20 per unit
Cash Breakeven in Units = (Fixed Cost - Depreciation) / (Selling Price per Unit - Variable Cost per Unit)
Cash Breakeven in Units = (60,000 - 25,000)/(7 - 1.20)
Cash Breakeven in Units = 6035 units approximately