Chester has negotiated a new labor contract for the next round that will affect the cost of their product. Labor costs go from $7.91 to $8.41 per unit Assume all other costs remain the same. If Chester were to pass on half of the new labor costs to their customers, how many units of product would need to be sold to break even?
This is impossible to calculate without knowing the total of the other costs or the price per unit. We have a fifty cent increase in costs and half the costs are being passed onto the customer, so ...
This solution shows the proper formula with related explanation to calculate the break-even amount in units.