Net Income Planning

Holland Corporation earned an after-tax net income of $300,000 last year. Fixed costs were $1,500,000. The selling price per unit of its product was $120, of which $50 was a contribution to fixed cost and net income. The income tax rate was 40%.

a. How many units of product were sold last year? Answer

units

b. What was the break-even point in units last year? Answer

units

c. The company wishes to increase its after-tax net income by 20% this year. If selling prices and the income tax rate remain unchanged, how many units must be sold?

Answer

units