Problem:
Senbet Ventures is considering starting a new company to produce stereos. The sales price would be set at 1.5 times the variable cost per unit; the VC/unit is estimated to be $2.50; and fixed costs are estimated at $120,000.
Required:
Question: What sales volume would be required in order to break even, i.e., to have an EBIT of zero for the stereo business?
- 86,640
- 91,200
- 96,000
- 100,800
- 105,840
Note: Please provide full description.