A proposed project has ﬁxed costs of $2,401.50, depreciation expense of $800, and a sales quantity of 950 units. What is the contribution margin if the projected level of sales is the
Accounting break-even point?
A) $3.37
B) $3.42
C) $3.45
D) $3.49
E) $3.52

Question

Quizplus · Accepted Answer

The accounting break-even point is where total revenue equals total costs, including fixed costs and depreciation. The contribution margin per unit is calculated by dividing the sum of fixed costs and depreciation by the sales quantity: ($2,401.50 + $800) / 950 = $3.37.

A Proposed Project Has ﬁXed Costs of $2,401