Question: Kingman Corp. has long been concerned with maintaining a solid annual profit. The company sells a line of fire extinguishers that are perfect for homeowners,

Kingman Corp. has long been concerned with maintaining a solid annual profit. The company sells a line of fire extinguishers that are perfect for homeowners, for an average of $10 each. The company has perfected its production process and now produces extinguishers with a variable cost of $4 per extinguisher. Kingman’s annual fixed costs are $92,000. Kingman’s tax rate is 40 percent.

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Calculate the number of extinguishers Kingman must sell to earn an after-tax profit of $60,000.

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