Toys 4 Us sells miniature drones for hobbyists for a price of $1,200. The variable cost for each drone is $750. The fixed costs associated with the drone amount to $900,000 per year.
Required
a. Compute the break-even point in units for the drone.
b. Assuming that the tax rate is 40 percent and the desired profit level is $135,000 after tax, compute the required unit sales level.