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Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics: Sales
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 | $ | 84 | per smoker |
| Variable costs | 36 | per smoker | |
| Fixed costs | 379,200 | per month | |
| | |||
Hunter & Sons is subject to an income tax rate of 40 percent.
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 $72,000 after taxes?
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