Jack's Jax has total fixed costs of $25,000. If the company's contribution margin is 60%, the income

Question:

Jack's Jax has total fixed costs of $25,000. If the company's contribution margin is 60%, the income tax rate is 25% and the selling price of a box of Jax is $20, how many boxes of Jax would the company need to sell to produce a net income of $15,000?

a. 5,625

b. 4,445

c. 3,750

d. 3,333

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...