x Company makes small custom area rugs that incorporate the image of your pet. Each rug requires $10.00 in DM and $10.00 in DL. x has to pay $4,800 in rent for the facility per month. Each rug sells for $30.00.

1. How many rugs does x need to produce and sell each month to break even?

ANSWER: 480

2. How many rugs does x need to produce and sell each month to achieve a before-tax profit of $4,000?

ANSWER: 880

3. If the relevant tax rate is 20%, how many rugs does x need to produce and sell each month to achieve an after-tax profit of $7,000?

ANSWER:

4. Given your answer in #3, calculate the margin of error in dollars.

ANSWER:

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