Maywood Company sells hand-knit scarves

Each scarf sells for $40. The company pays $60 to rent vending space for one day. The variable costs are $15 per scarf. How many scarves should the company sell each day in order to break even? (Round your answer up to the nearest whole scarf.)
A) 2 scarves
B) 3 scarves
C) 20 scarves
D) 4 scarves

B .B) Required sales in units = (Fixed costs + Target profit) / Contribution margin per unit
Unit contribution margin = Net sales revenue per unit - Variable costs per unit
Unit contribution margin = $40 - $15 = $25 per scarf
Required sales in units = ($60 + $0 ) / $25 = 3 scarves (rounded)