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What is the cash breakeven quantity in units

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Question - Solve the following break-even problem: Your analysis of the financial statements of the Soledad Company, a manufacturer of surfboards, reveals the following information. The company currently has $8.9 million in total assets, upon which it earns an operating return on assets of 14.6% and a total asset turnover ratio of 2.01 times. The company's contribution margin as a percentage of sales is 41.6%. Furthermore, the company pays $725,000 per year in interest, is in the 25% tax bracket and currently produces 70,000 surfboards per year. Based on this information, complete the following:

1. Construct an analytical income statement for the company based upon its current level of operations.

2. What is the company's accounting break-even level of unit output m breakeven level of sales dollars?

3. If the fixed costs include $1.2 million of depreciation expense, what is the cash breakeven quantity in units?

Reference no: EM133169382

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