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What is the solution to working this problem?
Let's say that a company produces a single product with a sale price of $25 per unit. The variable cost per unit is $15 and the company incurs fixed costs of $50,000 per month.
1. What is the breakeven point for this company (units & Sales)?
2. How much would we expect in profit for every unit sold above breakeven?
3. If the company has its budget set at $35,000 target profit, how many units must it sell to achieve the target profit?
4. If the company's tax rate = 35%, what is the breakeven in units to achieve a $35,000 Net Income (after tax).
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