Answer:
Accounting break-even
Case
1 11,386.13 units
2 = 28125 units
3 312.5 units
Cash break-even
Case Break-even
1 = 13,861.38
2 = 8125
3 = 312.5
Explanation:
<em>Accounting break even is computed as </em>
<em>Break-even = (total fixed cost + depreciation ) /selling price - variable cost per unit</em>
Case
1 = (7,000,000 + 1,250,000)/(2,800- 2,295)= 11386.13861
2 (65,000 +160,000)/(51-43 ) unit = 28125
3 (1,800 + 700)/ (12- 4)= 312.5
Cash break even
Under here only cash based fixed cost would be used , depreciation would be ignored. This is so because it is not a fixed cost .
<em>Break-even = (total fixed cost ) /selling price - variable cost per unit</em>
1 = (7,000,000 )/(2,800- 2,295)= 13,861.38
2 (65,000 )/(51-43 ) unit = 8125
3 (1,800 + 700)/ (12- 4)= 312.5
