Exercise 3-13 (Part Level Submission)

Cullumber Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $45 throughout the country to loyal alumni of over 4,000 schools. Cullumbers variable costs are 42% of sales; fixed costs are $116,000 per month.

C)

Assume that variable costs increase to 45% of the current sales price and fixed costs increase by $12,500 per month. If Cullumber were to raise its sales price by 11% to cover these new costs, what would be the new annual breakeven point in sales dollars? (Round sales price to 2 decimal places, e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.)