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. . . . . . . . . . . . $ 550 per smoker
Variable costs. . . . . . . . . . 330 per smoker
Fixed costs. . . . . . . . . . . . 143,000 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 $39,600 after taxes?