The target net income after taxes was $864 and the income rate is 40$. Let N be the number of units to be sold at $1.30 per unit with a variable cost of $1.10 per unit and total fixed costs of $18,000.00

$1.30N-$1.10N-$18,000= $864/1-0.4

$0.20N-$18,000=$1,440

$0.20N=$1,440+$18,000

$0.20=$19,440

N=$19,440/$0.20= 97,200 units

Now suppose the target net income after taxes was 1,200.00

$1.30N-$1.10N-$18,000=1,200/1-0.4

$0.20N-$18,000=$2,000

$0.20N=$2,000+$18,000

$0.20N=$20,000

N=$20,000/$0.20=100,000 units

Requirement:

1. Suppose the income tax rate was 25% instead of 40%. How many nits would the company have to sell to achieve a target after-tax net income of (a) $864 and (b)$1,440? Show your computations