Multiple Choice
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?
A) 21,250 units.
B) 18,750 units.
C) 24,375 units.
D) 14,167 units.Units required = (120,000 + 50,000) /(20 * .40) = 21,250 units.
Correct Answer:
Verified
Correct Answer:
Verified
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