Crest Industries sells a single model of satellite radio receivers for use in the home. The radios have the following price and cost characteristics:
Sales price . . . . . . . . . . . $ 80 per radio
Variable costs . . . . . . . . . $ 32 per radio
Fixed costs . . . . . . . . . . . $360,000 per month
Crest is subject to an income tax rate of 40 percent.
Required
a. How many receivers must Crest sell every month to break even?
b. How many receivers must Crest sell to earn a monthly operating profit of $90,000 after taxes?