The following information relates to Jarvis Company in 2014:

sales 60,000 units

variable costs $2.00/unit

Fixed costs $50,000 per year

sales price $7.00/unit

1) how many units would Jarvis Company need to sell to earn a profit before taxes of $10,000

A. 25,000 B. 10,000 C. 8,571 D. 12,000

2) How many units would Jarvis company need to sell to earn a profit after of $30,000 with an income tax rate of 60%

A. 25,000 B. 10,000 C. 8,571 D. 12,000

3) If Jarvis company spends an additional $40,000 on advertising in 2015, sales volume should increase by 10,000 units. What effect will this have on net income?

A. Increase by $30,000 B. Increase by $10,000 C. Increase by $20,000 D. Increase by $5,000