Use the following information to answer the next question(s).

-If the tax rate is 40 percent, how many units must be sold to earn an after-tax profit of $60,000?
A) 4,000
B) 1,500
C) 2,640
D) 2,546

Question

Use the following information to answer the next question(s).
 
-If the tax rate is 40 percent, how many units must be sold to earn an after-tax profit of $60,000?
A) 4,000 
B) 1,500 
C) 2,640 
D) 2,546

Quizplus · Accepted Answer

The after-tax profit is 60% of the pre-tax profit. So, the pre-tax profit is $60,000 / 0.6 = $100,000. The profit per unit is $100,000 / 2,546 = $39.32. So, the number of units that must be sold to earn an after-tax profit of $60,000 is 2,546.

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