Answered: The following price and cost data are…

The following price and cost data are given for firms A, B and C. Calculate the cash break-even point for each firm, assuming P5,000 of each firm’s fixed costs are depreciation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The following price and cost data are given for firms A, B and C. Calculate the cash break-even point for each firm, assuming P5,000 of each firm’s fixed costs are depreciation.

(check the attached picture)

A
B
P25
Selling price per unit
Variable cost per unit
P12
P15
P10
P6
P5
Fixed operating costs
P30,000
P24,000
P100,000

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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