A project has a contribution margin of $6, projected fixed costs of $14,000, projected variable cost per unit of $14, and a projected financial break-even point of 6,000 units. What is the operating cash flow at this level of output?
A) $22,000
B) $34,000
C) $46,000
D) $62,000
E) $70,000

Question

Quizplus · Accepted Answer

The operating cash flow at the financial break-even point is equal to the contribution margin per unit multiplied by the number of units sold. In this case, the contribution margin per unit is $6 and the number of units sold at the financial break-even point is 6,000. Therefore, the operating cash flow at the financial break-even point is $6 x 6,000 = $36,000.

A Project Has a Contribution Margin of $6, Projected Fixed