Answer:
36,000 baths
Explanation:
The computation of the bath towels that must the firm would sell at the break even point is shown below:
But before that the contribution margin per unit is
<u>Particulars Bath towels Hand towels Wash towels</u>
Selling price $10 $5 $2.5
Less: variable cost $4 $2 $1
Contribution margin $6 $3 $1.50
No of items in batch 4 3 2
Contribution margin per unit $24 $9 $3
Now the number of baths would be
= $324,000 ÷ ($24 + $9 + $3) × 4
= 36,000 baths