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Calculate the accounting break-even quantity

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Reference no: EM133204698

Jasper Auto Inc is going to invest in a new machine to produce Part A. The cost of the machine is $400,000. Part A will have variable cost per unit of $75.00 and the sales price per unit will be $140.00. Fixed costs will be $80,000. The machine is expected to have a life of eight years. Jasper Auto requires a return of 10% on their investments.

Required:

Ignoring the effect of taxes, calculate the following. Round all your answers to two decimal points.

  1. Accounting Break-even quantity
  2. Cash Break-even quantity
  3. Financial Break-even quantity
  4. Degree of operating leverage.

Reference no: EM133204698

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