Deon has a portable silk-screening business and sells t-shirts at sporting events such as the state track meet. His total fixed costs are $1,500 regardless of the number of shirts he produces. His variable costs are $0.75 for every shirt he makes. If he sells his shirts at $8 each, how many shirts does he need to sell at each event to break even? Round up to the next unit.

To calculate Deon's break-even price, use this formula:

Break-even is calculated as: fixed costs divided by contribution margin.

The contribution margin is the selling price minus variable costs. In other words, first calculate his contribution margin, and then divide Deon's fixed costs by that number.

a. 207 shirts

b. 2000 shirts

c. 1125 shirts

d. 189 shirts