Question: Cathy's Towels sells three items (which it purchases from a supplier): bath towels, hand towels, and washcloths in a 4:4:2 mix (thus, a batch of
Cathy's Towels sells three items (which it purchases from a supplier): bath towels, hand towels, and washcloths in a 4:4:2 mix (thus, a batch of 10 towels has 4 bath towels, 4 hand towels, and 2 washcloths). Each bath towel sells for $9 and costs $3, each hand towel sells for $7 and costs $4; and each washcloth sells for $2.50 and costs $1. The shop's annual fixed expenses are $324,000, and the income tax rate, t, is 20%. How many bath towels must the firm sell at the breakeven point? (Round per-unit amounts to 2 decimal places; round other intermediate calculations to nearest whole dollars.)
Multiple Choice
17,231.
33,231.
41,231.
48,231.
78,231.
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