Extensions of the Basic CVP Model—Taxes Action Games has developed a new computer game that it plans to sell for $32. The variable costs associated with each game (for materials, shipping, packaging) amount to $7. The fixed costs associated with the game amount to $75,000 per year.

Required

a. Compute the break-even point in units for the game.

b. Assuming that the tax rate is 40 percent and the desired profit level is $120,000 after tax, compute the required unit sales level.