Wear All,a T-shirt company,is conducting a breakeven analysis on unbleached cotton tops.Fixed costs are $100,000 and the per-unit contribution to fixed costs is $20.To break even,the company must sell _____ units.

A) 20,000
B) 5,000
C) 500
D) 200

Breakeven Analysis

Pricing-related technique used to determine the minimum sales volume a product must generate at a certain price level to cover all costs.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance.

Unit Contribution

The amount each unit sold contributes to covering fixed costs and generating profit, calculated as the unit selling price minus variable cost per unit.