HomeCraft Makes Wooden Play Sets

Multiple Choice

HomeCraft makes wooden play sets.The company pays annual rent of $400,000 per year and pays administrative salaries totaling $150,000 per year.Each play set requires $400 of wood,ten hours of labor at $70 per hour,and variable overhead costs of $100.Fixed advertising expenses equal $100,000 per year.Each play set sells for $3,200.What is HomeCraft's break-even output level?

A) 340 play sets
B) 325 play sets
C) 297 play sets
D) 258 play sets