Boise Timber co. computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $6,000,000, but 25 percent of this value is represented by depreciation. Its contribution margin (price minus variable cost) for each unit is $4. How many units does the firm need to sell to reach the cash break-even point

1,125,000

Explanation:

Break even point simply means when the total cost and the total revenue are equal.

Firstly, we need to calculate the cash related fixed cost for Boise Timber Co. This will be:

= Total fixed cost - Depreciation

= $6,000,000 - (25% × $6,000,000)

= $6,000,000 - (0.25 × $6,000,000)

= $6,000,000 - $1,500,000

= $4,500,000

The cash break-even point will be:

= $4,500,000/$4

= 1,125,000

Starbucks doesn't franchise.

Explanation:

Starbucks doesn't franchise because they want to run their own stores and can control the quality and profits.

In addiction, franchising is a way for companies to expand fast with less money. Starbucks is relying on their name to continue its success and growth. According to Starbuck's investor report , "Seattle's best coffee brand does offer franchise opportunities to qualified and select applicants , using a predefined set of criteria and focusing on multi-unit franchisees with a proven track record of success."

Starbucks pursues join ventures. Starbucks can be found in several grocery stores and retail stores. Starbucks has the name tights  but it is using the location of these venues to promote the product and introduce new customers in the Starbuck's pool.