Chester has negotiated a new labor contract for the next round that will affect the cost for their product Creak. Labor costs will go from $7.91 to $8.51 per unit. Assume all period and other variable costs remain the same. If Chester were to absorb the new labor costs without passing them on in the form of higher prices, how many units of product Creak would need to be sold next round to break even on the product?

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555

541

528

1,799

2025 Income Statement

Product Name	Creak	Cat	Cell	City	Na	Na	Na	Na	Total	Common Size
Sales	$58,104	$45,044	$44,777	$55,451	$0	$0	$0	$0	$203,376	100%
Variable Costs:
Direct Labor	$13,543	$9,217	$8,919	$11,182	$0	$0	$0	$0	$42,861	21.1%
Direct Material	$22,240	$19,328	$17,116	$21,956	$0	$0	$0	$0	$80,639	39.7%
Inventory Carry	$236	$434	$1,016	$1,058	$0	$0	$0	$0	$2,744	1.3%
Total Variable	$36,019	$28,978	$27,050	$34,196	$0	$0	$0	$0	$126,243	62.1%
Contribution Margin	$22,085	$16,065	$17,727	$21,255	$0	$0	$0	$0	$77,132	37.9%
Period Costs:
Depreciation	$2,911	$1,927	$2,720	$3,060	$0	$0	$0	$0	$10,617	5.2%
R&D	$858	$655	$510	$571	$0	$0	$0	$0	$2,595	1.3%
Promotions	$1,350	$1,350	$1,350	$1,350	$0	$0	$0	$0	$5,400	2.7%
Sales	$1,000	$1,000	$900	$900	$0	$0	$0	$0	$3,800	1.9%
Admin	$446	$346	$344	$426	$0	$0	$0	$0	$1,562	0.8%
Total Period	$6,565	$5,278	$5,824	$6,307	$0	$0	$0	$0	$23,973	11.8%
Net Margin	$15,520	$10,787	$11,903	$14,948	$0	$0	$0	$0	$53,159	26.1%