A product sells for $20 per unit,and has a contribution margin ratio of 40%.Fixed expenses total $120,000 annually.The company that makes and sells the product has an income tax rate of 40%.How many units must be sold to yield an after-tax operating profit of $30,000?

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Explanation:Contribution margin = $20 * 40% = $8 per unitBreakeven point = $120,000 / $8 = 15,000 unitsUnits to be sold to yield an after-tax operating profit of $30,000 = 15,000 + ($30,000 / (1 - 40%)) = 21,250 units

A Product Sells for $20 Per Unit,and Has a Contribution