Selling price per unit (package of 2 CDs)......................................

$20.00

Variable costs per unit:

Direct material...............................................................................................................

$4.00

Direct labor......................................................................................................................

$5.00

Artist's royalties..............................................................................................................

$3.50

Manufacturing overhead..........................................................................................

$3.00

Selling expenses............................................................................................................

$1.00

Total variable costs per unit............................................................

$16.50

Annual fixed costs:

Manufacturing overhead..........................................................................................

$180,000

Selling and administrative.......................................................................................

$220,000

Total fixed costs................................................................................

$400,000

Forecasted annual sales volume (120,000 units).........................

$2,400,000

What is ABC Inc.'s break-even point in units?