Question

Steve started an online store at ebay selling graphic t-shirts. In order to have mobile internet access, he subscribed AT&T mobile data broadband $60 per month. He also pays $100 per month for a storage unit for inventories. Steve purchased the t-shirt from whole sale price of $7.50 per unit and sells it for $14.99 at ebay Also, there is a $.99 listing cost from ebay for each t-shirt. Steve also needs to pay $3 to print various graphics on each t-shirt. Please calculate the break event point for Steve's t-shirt business.

Answer 1

Break Even Point for Steves t-shirt business

= Total Fixed costs / (sale price - variable costs)

= (60+100)/(14.99-7.5-.99-3)

= 160 / 3.5

= 45.71 Units

or 46 Units (rounded off to nearest whole number)

So the correct answer is break even point in T shirts = 46 Units