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.)
A) 175 units
B) 3,500 units
C) 80 units
D) 350 units
D .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
Business
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