Henry\'s Hoodies produces a variety of sweatshirts for college students. Henry\'

Question

Henry's Hoodies produces a variety of sweatshirts for college students. Henry's produces sweatshirts in batches and currently produces five batches per year. The company's controller recently implemented an activity-based costing system and would like to calculate break-even sales for the owner under this new costing system. He has prepared the following representative data: Average sweatshirt sales price $40.00 Direct materials (per unit) $4.50 Direct labor (per unit) $5.00 Variable overhead (per unit) $0.50 Setup costs (per batch) $2,500 Fixed cost (in total) $42,000 Calculate the number of sweatshirts Henry's Hoodies must sell to break even. Round your answer to the nearest whole number.

Explanation / Answer

cost of one sweatshirt 50 dollar cost for five batch 2500*5=12500 total cost for sweatshirt is 42000-12500=29500 no. of sweat shirt is 29500/50=590 590

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