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15 - 12A. A Study in Calculating a Break-Even Point

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15 - 12A. Break-Even Point

You are a hard-working analyst in the office of financial operations for a manufacturing firm that produces a single product. You have developed the following cost structure information for this company. All of it pertains to an output level of 10 million units. Using this information, find the break-even point in units of output for the firm.

? Return on operating assets = 25%
? Operating asset turnover = 5 times
? Operating assets = $20 million
? Degree of operating leverage = 4 times

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15 - 12A. Break-Even Point

You are a hard-working analyst in the office of financial operations for a manufacturing firm that produces a single product. You have developed the following cost structure information for this company. All of it pertains to an output level of 10 million units. Using this information, find the break-even point in units of output for the firm.

? Return on operating assets = 25%
? Operating asset turnover = 5 times
? Operating assets = $20 million
? Degree of operating leverage = 4 times

$2.19