Inland Company has signed a contract that requires them to produce and sell 50,000 units for $5 per unit. A regression model was run using 22 observations to measure total costs as a function of units. It is as follows: Total costs == $120,000 $2 per unit The standard error of the estimate is $10,000. Required: a. Calculate the following assuming certainty: 1. Breakeven in units and dollars Sales quantity needed to obtain an after-tax profit of $21,000. Assume that a 30 percent tax

7. Inland Company has signed a contract that requires them to produce and sell 50,000 units for $5 per unit. A regression model was run using 22 observations to measure total costs as a function of units. It is as follows: Total costs $120,000 + $2 per unit The standard error of the estimate is $10,000. Required: Calculate the following assuming certainty: i. Breakeven in units and dollars ii. Sales quantity needed to obtain an after-tax profit of $21,000. Assume that a 30 percent tax rate is used for only part ii. iii. Sales in dollars needed to obtain a pretax profit equal to 10 percent of sales. b. Calculate the following assuming uncertainty: i. What is the range of incomes that would be expected with 90 percent confidence? ii. What is the range of incomes that would be expected with 99 percent confidence?