Aberra Corporation sells widgets for $15 each. For the month of June, Aberra sold 8,000 widgets and reported variable costs of $24,000 and fixed costs of $78,000. Assume that Aberra increased its selling price by 20 percent on July 1.

Required:

A. How many widgets have to be sold in July to break even?

B. How many widgets have to be sold to earn a before-tax profit of $44,000?

C. If Aberra is subject to an income tax rate of 30 percent, how many widgets have to be sold to earn an after-tax profit of $44,000?

D. How many widgets have to be sold to earn a before-tax profit of 20 percent of sales? (Hint: Define the desired profit as a percentage of sales rather than a dollar amount.)

E. How many widgets have to be sold to earn an after-tax profit of 20 percent of sales?

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