(Break Even Analysis) given the following Information:
Project Accounting Break-even Point (in units) Price per unit Variable Cost per unit Fixed Costs Depreciation
A 6,240 $53 $103,000 $26,000
B 780 $1,020 $499,000 $102,000
C 1,960 $22 $14 $4,600
D 1,960 $22 $6 $12,000
1. What is the price per unit of Project A? (round to the nearest cent)
2. 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.
3. Calculate the cash break even for the above projects. What do the differences in the accounting and cash break even tell you about the four projects?