HomeCraft makes wooden play sets. The company pays annual rent of $400,000 per year and pays
administrative salaries totaling $150,000 per year.
Each play set requires $400 of wood, ten hours of
labor at $70 per hour, and variable overhead costs of $100. Fixed advertising expenses equal
$100,000 per year. Each play set sells for $3,200. What is HomeCraft's break-even output level?
A) 340 play sets B) 325 play sets C) 258 play sets D) 297 play sets
B
Business
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