You Are Selling a New Line of T-Shirts on the Boardwalk

question 217

Multiple Choice

You are selling a new line of T-shirts on the boardwalk. The selling price will be $25 per shirt. The labor cost is $5 per shirt. The administrative costs of operating the company are estimated to be $60,000 annually, and the sales and marketing expenses are $20,000 a year. Additionally, the cost of materials will be $10 per shirt. What is the break-even quantity?

• A) 2,000 shirts
• B) 3,200 shirts
• C) 5,334 shirts
• D) 8,000 shirts
• E) 16,000 shirts

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Definitions:

Market Values

The present rate at which a service or asset is available for purchase or sale on the market.

Book Values

The value of an asset as it appears on a balance sheet, calculated as cost minus accumulated depreciation.

Market Value

The present cost at which a service or asset is available for purchase or sale.

Book Value

The net value of a company's assets as recorded on the balance sheet, calculated by subtracting liabilities from the total value of assets.