You Have Been Asked to Calculate the Break-Even Point for a New

question 210

Multiple Choice

You have been asked to calculate the break-even point for a new line of souvenir tee-shirts.The selling price will be $25 per shirt.The labor costs will be $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)1,715 shirts
• B)2,286 shirts
• C)3,000 shirts
• D)4,000 shirts
• E)8,000 shirts

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