If TechCor has fixed costs of $60,000, variable costs of $1.20/unit, a sales price/unit of $7, and depreciation expense of $25,000, what is its cash breakeven in units?

Break-even point (units)= 10,345

Explanation:

Giving the following information:

Fixed costs= $60,000

Variable costs= $1.20/unit

Selling price= $7

Because it is asking the cash break-even analysis, we will not include the depreciation expense. It is a cost but does not require a cash disbursement.

TO calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point (units)= 60,000 / 7 - 1.2

Break-even point (units)= 10,345