Kingman Corp. has been concerned with maintaining a solid annual profit. The company sells a line of fire extinguishers that are prefect 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 cost are $92,000. Kingman's tax rate is 40%.
Hint Given: First calculate sales $ and then divide by the selling price of $10 per unit to get unit sales
Calculate the number of extinguishers Kingman must sell to earn an after-tax profit of $60,000.