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Stew’s Plastics produces a variety of CD cases. The best-selling product is the CD-50. Several products are produced on the same manufacturing line, so there is a setup cost each time a changeover is made for a new product. The setup cost for the CD-50 is $3500. In addition, it costs $1.78 for each unit (CD Case) produced, and for each 100 CD Cases they have to put them in a box that costs $2.63. If there is less than 100 CD Cases they will put them in a box (in other words, if they had 102 CD Cases, they would do 2 boxes, one with 100 CD Cases and one with 2 CD Cases).
What is the break-even point (in terms of number of CD cases) if they sell them for $6.00 each?
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