Calculate the expected annual cash breakeven point

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Reference no: EM131336804

The Covington Engine Company is considering opening a new plant facility to build truck engines.

As part of a detailed analysis of the proposed facility, Covington's management wants some information on the cash breakeven point.

Fixed costs for the facility are expected to be $6 million a year, including depreciation expenses of $800,000 a year. The engines' sales price is expected to be $7,000 per unit, and the variable cost is expected to be $3,000 per unit.

Calculate the expected annual cash breakeven point and the expected annual cash breakeven sales.

Reference no: EM131336804

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