The Hernandez Brothers Company wants to earn an AFTER-tax profit of $180,000.The company sells each unit for $100 and variable costs represent 60% of sales.If fixed costs total $62,000 and the company's tax rate is 40%, how many units does the company need to sell in order to meet their goal?

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Explanation:Contribution Margin = $100 - ($100 x 60%) = $40Contribution Margin Ratio = $40/$100 = 40%Break-even Sales = $62,000/40% = $155,000Sales to earn $180,000 after-tax profit = $180,000/(1 - 40%) = $300,000Units to be sold = $300,000/$100 = 3,000 units

The Hernandez Brothers Company Wants to Earn an AFTER-Tax Profit