Chandler Manufacturing Company produces a product that sells for $35 per unit. Last year, the company manufactured and sold 20,000 units to obtain an after-tax profit of $54,000. Variable and fixed costs follow:

Variable Costs per Unit Fixed Costs per Unit

Manufacturing $18 Manufacturing $ 80,000

Selling and administrative 7 Selling and administrative $ 30,000

Total $ 25 Total $ 110,000

Required:

Determine the tax rate the company paid last year.

What unit sales volume is required to provide an after-tax profit of $90,000?

If the company reduces the unit variable cost by $2.50 and increases fixed manufacturing costs by $20,000, what unit sales volume is required to provide an after-tax profit of $90,000?

What assumptions are made about taxable income and tax rates in requirements (a) through (c)?