Answer:
correct option is (A) 16,500 units.
Explanation:
given data
shirts sold = $7.50
variable cost = $2.25
after tax net income = $5,040
selling price =$10
solution
we get here first fixed cost that is
Break even sales units = Fixed costs ÷ Contribution per unit .............1
put here value
20000 =
Fixed costs = $105000
and
Fixed costs coming year will be
Fixed costs coming year = ($105000 × 1.10)
Fixed costs coming year = $115500
and
Variable cost = $2.25 + ($2.25 × )
Variable cost = $3
so that Contribution margin will be
Contribution margin = Sales price - Variable cost ............2
Contribution margin = $10 - $3
Contribution margin = $7
and
break even sales units is
break even sales =
break even sales = 16500 units
so correct option is (A) 16,500 units.