From the information in the table below,calculate the unit sales necessary to achieve the desired profit.
$\begin{array}{|l|r|}
\hline \text { Selling price per unit} & \$ 20.00 \
\hline \text { Variable cost per unit }& \$ 12.00 \
\hline \text { Fixed costs }&\$ 50000 \
\hline \text { After-tax desired profit }& \$ 70000 \
\hline \text { Tax rate} & 30 \% \
\hline
\end{array}$
A) 15 000 units.
B) 8 750 units.
C) 12 500 units.
D) 18 750 units.

Question

From the information in the table below,calculate the unit sales necessary to achieve the desired profit.
$\begin{array}{|l|r|}
\hline  \text {  Selling price per unit} & \$ 20.00  \
\hline  \text {  Variable cost per unit }& \$ 12.00 \
\hline   \text { Fixed costs }&\$ 50000  \
\hline   \text { After-tax desired profit }&  \$ 70000 \
\hline   \text { Tax rate} &  30 \%  \
\hline
\end{array}$
A) 15 000 units.
B) 8 750 units.
C) 12 500 units.
D) 18 750 units.

Quizplus · Accepted Answer

$70 000/(1 - 0.30) = pre-tax profit $100 000. $20 - $12 = CM $8/unit.
(50 000+100 000)/8 =18 750 units to cover the fixed costs plus the target profit.

From the Information in the Table Below,calculate the Unit Sales