Huston Company has annual fixed costs totaling $3,000,000 and variable costs of $450 per unit.Each unit of product is sold for $850.Assume a tax rate of 30 percent.How many units must be sold to earn an annual profit of $210,000 after taxes?
A)8,250
B)4,586
C)9,250
D)8,025
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

Explanation:Contribution Margin per unit = $850 - $450 = $400Profit after taxes = $210,000 / (1 - 0.30) = $300,000Units to be sold = $3,000,000 + $300,000 / $400 = 8,250 units

Huston Company Has Annual Fixed Costs Totaling $3,000,000 and Variable