Yerke Company Makes Jungle Gyms and Tree Houses for Children

Multiple Choice

Yerke Company makes jungle gyms and tree houses for children.For jungle gyms, the price is $120 and variable expenses are $90 per unit.For tree houses, the price is $200 and variable expenses are $100.Total fixed expenses are $253,750.Last year, Yerke sold 12,000 gyms and 4,000 tree houses.Now suppose that Yerke expects tree house demand to increase from 4,000 to 8,000 units.
- What is the number of tree houses sold at break-even?

A) 1,750
B) 668
C) 2,625
D) 1,002
E) 875