Question: Chester has negotiated a new labor contract for the next round that will affect the cost for their product Cute. Labor costs will go from $7.75 to $8.25 per unit. Assume all period and variable costs as reported on Chester's Income Statement remain the same.
If Chester were to pass on half the new labor costs to their customers, how many units of product Cute would need to be sold next round to break even on the product?