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20 November, 16:13

Tucker's Trucking is considering a project with a discounted payback period just equal to the project's life. The projections include a sales price of $39, variable costs per unit of $14, and fixed costs of $238,000. The operating cash flow is $24,300. What is the break-even quantity?

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  1. 20 November, 16:40
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    Break-even quantity = 9520 units

    Explanation:

    Giving the following information:

    The projections include a sales price of $39.

    Variable costs per unit of $14.

    Fixed costs of $238,000.

    The operating cash flow is $24,300.

    Break-even quantity = Fixed costs/contribution margin

    Break-even quantity = 238000 / (39-14) = 9520 units
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