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ABC Inc. manufactures and sells toys. Price and cost data are as follows: Selling price per unit (package of 2 CDs)...................................... $27.00 Variable costs per
Selling price per unit (package of 2 CDs)...................................... | $27.00 |
---|---|
Variable costs per unit: | |
Direct material............................................................................................................... | $6.00 |
Direct labor...................................................................................................................... | $6.00 |
Artist's royalties.............................................................................................................. | $4.50 |
Manufacturing overhead.......................................................................................... | $4.00 |
Selling expenses............................................................................................................ | $1.00 |
Total variable costs per unit............................................................ | $21.50 |
Annual fixed costs: | |
Manufacturing overhead.......................................................................................... | $190,000 |
Selling and administrative....................................................................................... | $300,000 |
Total fixed costs................................................................................ | $490,000 |
Forecasted annual sales volume (120,000 units)......................... | $3,240,000 |
Management estimates that direct-labor costs will increase by 8% next year.
How many units will the company have to sell next year to reach its break-even point?
(Please indicate a whole number; no decimal places. Example: 98600)
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