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.  a.  How many units must be sold to achieve this after-tax income level?  b.  What level of pre-tax income must the firm earn to achieve the desired result described above?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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. 

a.  How many units must be sold to achieve this after-tax income level? 

b.  What level of pre-tax income must the firm earn to achieve the desired result described above?

Can you show your workings please

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