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