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A Company Has Total Fixed Costs of $200,000

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A company has total fixed costs of $200,000. Its product sells for $25 per unit and variable costs amount to $15 per unit. The company wishes to earn an after-tax income of $35,000. Assume that the company has a 30% tax rate. How many units must be sold to achieve this after-tax income level?


Definitions:

Injunction

A court order that either prohibits a party from doing a specific act (restraining order) or orders a party to carry out a specific act (mandatory order), typically to prevent harm or to preserve the status quo during litigation.

Civil Lawsuit

A legal action taken by one party against another for the purpose of resolving a dispute or claiming damages.

Deceptive Advertising

The practice of advertising with claims that mislead or could mislead a reasonable consumer.

Industry Guides

Publications or documents issued by regulatory bodies that provide compliance guidelines for specific industries.

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