FIN 370 15-12A (Break-even point) You are a hard working analyst in the office of financial
operations for a manufacturing firm that produces a single product.
STUDY QUESTIONS
Chapter 15 Financial Management: Principles and Applications text, by Keown.
(Break-even point)
15.12A (Break-even point) You are a hard working analyst in the office of financial operations for a
manufacturing firm that produces a single product. You have developed the following cost structure
information for this company. All of it pertains to an output level of 10 million units. Using this
information, find the breakeven point in units of output for the firm.
Return on operating assets = 25%
Operating asset turnover = 5 times
Operating assets = 20 million
Degree of operating leverage = 4 times
