Hurst Company sells hand-sewn shirts for $40 per shirt.It incurs monthly fixed costs of $7,000.The contribution margin ratio is calculated to be 50%.What is the breakeven point in units? (Round your answer up to the nearest whole unit. )

Question

Quizplus · Accepted Answer

D)Required sales in dollars = (Fixed costs + Target profit)/ Contribution margin ratio
Required sales in dollars = ($7,000 + 0)/ 50% = $14,000.00
Number of units to be sold to break even = $14,000.00 / $40 = 350 units

Hurst Company Sells Hand-Sewn Shirts for $40 Per Shirt