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Question
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
Answer
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