If targeted after- tax net income is $67,500 with a 40% tax rate, contribution margin per unit is $2.00, and total fixed costs are $370,000, then the number of units which must be sold is:
A) 241,250 units
B) 218,750 units
C) 167,250 units
D) 160,833 units

Question

Quizplus · Accepted Answer

The correct answer is A.The number of units which must be sold is:$67,500 / ($2.00 * (1 - 0.40)) - $370,000 / $2.00 = 241,250 units

If Targeted After- Tax Net Income Is $67,500 with a 40