A product sells for $210 per unit,and its variable costs per unit are $130.The fixed costs are $420,000.If the firm wants to earn $35,000 after tax income (assume a 30% tax rate),how many units must be sold?
A) 6,500
B) 6,275
C) 500
D) 5,875
E) 5,500

Question

Quizplus · Accepted Answer

Units required to earn target after-tax income of $35,000 = [($35,000/.7) + $420,000]/$80 = 5,875 units

A Product Sells for $210 Per Unit,and Its Variable Costs