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Find how many units of product b must sell

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Reference no: EM132649965

                                              Product A                 Product B
Sales (units)                   120,000                    400,000

Sales                               $ 6,000,000              $ 48,000,000

Less: variable costs                 (2,400,000)           (38,000,000)

Contribution margin                    $ 3,600,000         $ 10,000,000

Less: fixed costs                           (2,398,000)         (6,200,000)

Operating profit (loss)                       $ 1,202,000            $ 3,800,000

Problem 1: If Company wants to achieve a total net (after-tax) income of $7,000,000 and has a tax rate of 30%, how many units of Product B must it sell if the sales mix remains unchanged?

Reference no: EM132649965

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