Question
Your company manufactures and sells hats. Last year, your hats sold for $7.50 each. The variable costs for your hats were $2.25 per unit. Overall,
Your company manufactures and sells hats. Last year, your hats sold for $7.50 each. The variable costs for your hats were $2.25 per unit. Overall, you found that to break even, your company needed to sell 20,000 hats. Your net income last year was $5,040 (this amount is after taxes of 40%). Your expectations for the coming year are as follows: The new sales price for hats will be $9 Variable costs will increase by $0.75 Fixed costs will increase by 10% The 40% income tax rate will not change If your goal is to earn $22,500 in net income (i.e., after taxes) this upcoming year, what do your total sales dollars need to be?
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