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nas fixed costs of $80,000, Its product currently unit and has variable costs of $2.50 per unit. Me. Bic, the head of manufacturing, proposes to buy new equipment that will cost $400.000 and drive up fixed costs to S120,000. Although the price will remain at $5 per unit, As a result of Bic's suggestion, will the break-even point go up or Compute the necessary numbers. the increased automation will reduce costs per unit to $2.00. a (LoS-2 7. Calloway Cab Company determines nes its break-even strictly on the basis of cash Cash bn analysi (Los-2) expenditures related to fixed costs. Its total fixed costs are $450,0, but 5 percent of this value is represented by depreciation. Its contribution margin (price minus variable cost) for each unit is $4.10. How many units does the firm need to sell to reach the cash break-even point? Air Purifier Inc. computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $2,450,000, but analys 15 percent of this value is represented by depreciation. Its contribution margin (LOs- (price minus variable cost) for each unit is $40. How many units does the firm need to sell to reach the cash break-even point? Boise Timber Co. computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $6,500,000, but analy Cash b 8. Cash 10 percent of this value is represented by depreciation. Its contribution margin LO (price minus variable cost) for each unit is $9. How many units does the firm need to sell to reach the cash break-even point? 9. l0 percent of his value i 2

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