Cost-Volume-Profit Analysis

Gannon Company sells a single product for $18.75 per unit. Variable costs are $9 per unit and fixed costs are $134,940 at an operating level of 12,000 to 25,000 units.

Round UP answers to the nearest unit, when applicable.

a. What is Gannon Company's break-even point in units? Answer

units

b. How many units must be sold to earn $20,000 before income tax? Answer

units

c. How many units must be sold to earn $30,000 after income tax, assuming a 40% tax rate? Answer

units