The following information pertains to Korning Corp.:How many total units must be sold to obtain an after-tax profit (πA) of $47,775?

Question

Quizplus · Accepted Answer

To find the total units required to obtain an after-tax profit of $47,775, we need to use the following formula: 
πA = (P - VC - FC - T)(1 - T)
where,
πA = After-tax profit
P = Price per unit
VC = Variable cost per unit
FC = Total fixed cost
T = Tax rate

Substituting the given values, we get:
47775 = (90 - 48 - 21300 - 0.4*90)(1 - 0.4)
47775 = (42 * 0.6)
47775 = 25.2

Therefore, the total units required to obtain an after-tax profit of $47,775 is:
Total Units = (FC + πA) / (P - VC)
Total Units = (21300 + 47775) / (90 - 48)
Total Units = 69075 / 42
Total Units = 1645 / 10
Total Units = 164.5

Rounding off to the nearest whole number, we get:
Total Units = 165

Hence, the best choice is C, 955 units.

The Following Information Pertains to Korning Corp