Gato Inc. sells one product that sells for $52.06 and has variable costs of $37.92. The...
Gato Inc. sells one product that sells for $52.06 and has variable costs of $37.92. The annual fixed costs are $232889 and the firm’s tax rate is 31.89%. How many units must be sold if Gato wants to earn $105869 after taxes?
Select one:
a. 23957
b. 27463
c. 16228
d. 16470
Homework Answers
Revenue to be earned
= 105869/(100-31.89)
= 155438
Units needed to be sold = (Fixed cost + Revenue to be earned) /Contribution margin per unit
= (232889+155438)+(52.06-37.62)
= 388327/14.14
= 27463 (Option B)
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