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Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics:
| | | | |
| Sales price | $ | 77 | per smoker |
| Variable costs | | 38 | per smoker |
| Fixed costs | | 273,000 | per month |
| |
Hunter & Sons is subject to an income tax rate of 40 percent.
Required:
a. How many smokers must Hunter & Sons sell every month to break even?
b. How many smokers must Hunter & Sons sell to earn a monthly operating profit of $84,240 after taxes?
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