Chester has negotiated a new labor contract for the next round that will affect the cost for their product Camp. Labor costs will go from $1.81 to $2.31 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 Camp would need to be sold next round to break even on the product? There are no fixed costs.
A. 1,027
B. 906
C. 878
D. 851
Annual Reporit Round: 3 Dec. 31, 2019 Chester C59559 Balance Sheet 2019 Common Size 12.1% 60% 6 6% SSETS DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash $29,355 $14,552 $15,902 $27,092 $11,600 $16,452 Cash our end-of-year cash position. Accounts Receivable: Reflects the lag between delivery Accounts Receivable and payment of your products. Inventories: The nventory current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, all to your competitors. Plant & Equipment: otal Current Assets $59,809 247% $55,144 $271,020 ($88,921) $225,560 ($70,853) Plant & Equipment 112.0% -36.8% he current value of your plant. Accum Deprec: Accumulated Depreciation he total accumulated depreciation from your plant. Accts Payable: What the company otal Fixed Assets $182,099 753% $154,707 urrently owes suppliers for materials and services. Current Debt: The debt the company Total Assets is obligated to pay during the next year of operations. It includes emergency loans used to LIABILITIES & OWNERS keep your company solvent should you run out EQUITY of cash during the year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of our bonds. Common Stock: The amount of capital invested by shareholders in the company Retained Earnings: The profits that the $241,908 100.0% $209,851 ccounts Payable urrent Debt ong Term Debt $9,044 $27,145 $107,254 37% 11 .2% 44.3% $8,432 $35,835 $85,514 otal Liabilities $143,443 59.3% $129,781 mpany chose to keep instead of paying to shareholders as dividends $54,318 $44,145 225% 18.2% $36,246 $43,825 Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $98,463 40.7% $80,071 $241,908 100.0% $209,851 Annual Reporit Round: 3 Dec. 31, 2019 Chester C59559 Balance Sheet 2019 Common Size 12.1% 60% 6 6% SSETS DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash $29,355 $14,552 $15,902 $27,092 $11,600 $16,452 Cash our end-of-year cash position. Accounts Receivable: Reflects the lag between delivery Accounts Receivable and payment of your products. Inventories: The nventory current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, all to your competitors. Plant & Equipment: otal Current Assets $59,809 247% $55,144 $271,020 ($88,921) $225,560 ($70,853) Plant & Equipment 112.0% -36.8% he current value of your plant. Accum Deprec: Accumulated Depreciation he total accumulated depreciation from your plant. Accts Payable: What the company otal Fixed Assets $182,099 753% $154,707 urrently owes suppliers for materials and services. Current Debt: The debt the company Total Assets is obligated to pay during the next year of operations. It includes emergency loans used to LIABILITIES & OWNERS keep your company solvent should you run out EQUITY of cash during the year. Long Term Debt: The company's long term debt is in the form of bonds, and this represents the total value of our bonds. Common Stock: The amount of capital invested by shareholders in the company Retained Earnings: The profits that the $241,908 100.0% $209,851 ccounts Payable urrent Debt ong Term Debt $9,044 $27,145 $107,254 37% 11 .2% 44.3% $8,432 $35,835 $85,514 otal Liabilities $143,443 59.3% $129,781 mpany chose to keep instead of paying to shareholders as dividends $54,318 $44,145 225% 18.2% $36,246 $43,825 Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $98,463 40.7% $80,071 $241,908 100.0% $209,851
