Homework Answers
Selling Price per unit = $100
Variable cost per unit = $30+20 = $50
Contribution Margin per Unit = $50
Fixed costs = $300,000
Desired Profit after tax = $200,000
Desired Profit before tax = 200,000/(1-20%) = $250,000
Desired Contribution Margin = Desired Profit + Fixed costs = 250,000+300,000 = $550,000
Number of units required to be sold = 550,000/50
= 11,000 units
Hence, the answer is 11,000 units
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