Questions:

1. How many lawn chairs does Rachel need to sell to break even?

2. How many chairs does Rachel need to sell to earn $450,000 in net income? (The effective tax rate is 20%.)

Rachel Robinson is starting a new business (she has a great idea for a new lawn chair). She comes to you to get some advice. She gives you the following details: Expected elling price per chair$80.00 45.00 Fixed costs related to the new product 586,585 Expected variable cost per chair How many chairs will Rachel need to sell to break even? How many chairs will she need to sell to generate $$450,000 in net income? (Assume the effective tax rate for the company will be 20%.)