EX 3-42

Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics.

Sales price	$	78	per smoker
Variable costs		33	per smoker
Fixed costs		346,500	per month

Hunter & Sons is subject to an income tax rate of 40 percent.

Required:

a. How many smokers must Hunter & Sons sell every month to break even?

b. How many smokers must Hunter & Sons sell to earn a monthly operating profit of $83,700 after taxes?