Cathy's Towels Sells Three Items (Which It Purchases from a Supplier)

question 38

Multiple Choice

Cathy's Towels sells three items (which it purchases from a supplier) : bath towels, hand towels, and washcloths in a 4:3:2 mix (thus, a batch of 9 towels has 4 bath towels, 3 hand towels, and 2 washcloths) . Each bath towel sells for $10 and costs $4, each hand towel sells for $5 and costs $2; and each washcloth sells for $2.50 and costs $1. The shop's annual fixed expenses are $324,000, and the income tax rate, t, is 40%. How many bath towels must the firm sell at the breakeven point?

• A) 20,000.
• B) 36,000.
• C) 44,000.
• D) 51,000.
• E) 81,000.

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Definitions:

Electrical Circuits

Pathways that allow electricity to flow from a source, through components, and back to the source forming a complete loop.

Control Coil

An electromagnetic coil used within certain systems to control the operation or movement of a component, often found in relays and solenoids.

SAE Relay

A type of electrical relay that meets the standards set by the Society of Automotive Engineers, used in automotive applications.

Closed Status

Refers to a condition or state of a system, process, or item that is not open for changes, operations, or transactions.