CLO 2(c) Ruben Corporation – Breakeven point,

Corresponds to CLO 2(c) Ruben Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable cost to manufacture them was $2.25 per unit. The company needed to sell 20,000 shirts to break even. The net income last year was $5,040. Ruben’s expectations for the coming year include the following:

– The sales price of the T-shirts will be $9
– Variable costs to manufacture will increase by one-third
– Fixed costs will increase by 10%
– The income tax rate of 40% will be unchanged

The number of T-shirts Ruben Corporation must sell to break even in the coming year is:

a) 17,500
b) 19,250
c) 20,000
d) 22,000