Reference no: EM132067248

Question - Sacramento Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $4 per unit. Enough capacity exists in the company's plant to produce 20,000 units of the toy each month. Variable costs to manufacture and sell one unit would be $1.25, and fixed costs associated with the toy would total $35,000 per month.

Suppose Sacramento wants to achieve an after-tax profit of $15,000, how many units of inflatable toys do they have to sell? Their expected tax rate is 30%. Please show detailed help with steps and answer.

A) 18,182

B) 12,727

C) 20,000

D) 20,519

E) 30,909