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What is the required dollar sales

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Question - Currently, ABC Co. sells shirts for $20/ shirt. The marginal cost of production is currently is $9/ shirt with fixed costs set at $1,500/ year. The tax rate is 20%.

Assume that ABC Co. intends to expand operations and enters into a 10 year lease at $500/ month. It expects to increase the cost of its shirts to $18/ shirt and reduce marginal costs by $2/ shirt. It also expects to earn net income of $5/ shirt. What is the required dollar sales (round to the nearest dollar)?

Reference no: EM132715020

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