Problem 15-12A Finance 370
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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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Solution Summary
This is a puzzle, requiring you to first solve for missing amounts (computations shown) and then construct a contribution margin income statement. Then, using that, you figure the per unit sales and per unit contribution margin. Finally, you can compute break-even. Click on cells to see computations.
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This is a puzzle, requiring you to first solve for missing amounts ...
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