Chester has negotiated a new labor contract for the next round that will affect the cost for their product City. Labor costs will go from $2.57 to $3.07 per unit. Assume all period and variable costs as reported on Chester's Income Statement remain the same. If Chester were to pass on half the new labor costs to their customers, how many units of product City would need to be sold next round to break even on the product?

Name

Primary Segment

Units Sold

Unit Inven tory

Revision Date

Age Dec.31

MTBF

Pfmn Coord

Size Coord

Price

Material Cost

Labor Cost

Contr. Marg.

2nd Shift & Over- time

Auto mation Next Round

Capacity Next Round

Plant Utiliz

City	Thrift	1,424	275	6/10/2023	3.7	17000	6.8	13.2	$16.00	$6.80	$2.57	38%	0%	10.0	1,600	99%
Cozy	Thrift	1,497	280	6/10/2023	3.6	17000	7.0	13.0	$16.00	$6.96	$2.57	37%	0%	10.0	1,750	93%
Creak	Core	1,406	228	12/16/2021	2.1	18000	9.9	9.5	$24.00	$9.72	$4.29	39%	32%	8.0	1,100	131%
Crimp	Core	1,564	221	12/18/2021	2.1	20000	10.6	10.0	$24.00	$10.36	$4.20	37%	23%	8.0	1,300	122%

Income Statement

(Product Name:)	City	Cozy	Creak	Crimp	Na	Na	Na	Na	2022 Total	Common Size
Sales	$22,780	$23,951	$33,752	$37,538	$0	$0	$0	$0	$118,020	100.0%
Variable Costs:
Direct Labor	$3,778	$3,981	$6,108	$6,629	$0	$0	$0	$0	$20,496	17.4%
Direct Material	$10,081	$10,855	$14,214	$16,808	$0	$0	$0	$0	$51,957	44.0%
Inventory Carry	$321	$333	$395	$397	$0	$0	$0	$0	$1,446	1.2%
Total Variable	$14,180	$15,169	$20,717	$23,834	$0	$0	$0	$0	$73,900	62.6%
Contribution Margin	$8,600	$8,781	$13,035	$13,704	$0	$0	$0	$0	$44,121	37.4%
Period Costs:
Depreciation	$4,907	$5,367	$2,787	$3,293	$0	$0	$0	$0	$16,353	13.9%
SG&A: R&D	$1,000	$1,000	$0	$0	$0	$0	$0	$0	$2,000	1.7%
Promotions	$1,250	$1,250	$1,250	$1,250	$0	$0	$0	$0	$5,000	4.2%
Sales	$1,400	$1,400	$1,100	$1,100	$0	$0	$0	$0	$5,000	4.2%
Admin	$253	$266	$375	$417	$0	$0	$0	$0	$1,311	1.1%
Total Period	$8,810	$9,283	$5,512	$6,060	$0	$0	$0	$0	$29,665	25.1%
Net Margin	($210)	($502)	$7,523	$7,644	$0	$0	$0	$0	$14,456	12.2%

Fixed Cost is same as Period Cost ?