The following information pertains to Korning Corp.: Selling price per unit $ 670 Variable cost per unit $ 250 Total fixed costs $ 327,600 Income tax rate 35 % How many total units must be sold to obtain an after-tax profit (πA) of $47,775?

955 unit

Explanation:

Data provided in the question:

Selling price per unit = $670

Variable cost per unit = $250

Total fixed costs = $327,600

Income tax rate = 35%

After tax Desired profit = $47,775

Now,

Before tax profit = [ After tax Desired profit ] : [1 - Tax rate ]

= $47,775 : [1 - 0.35 ]

= $73,500

Contribution required = Total fixed costs + Before tax profit

= $327,600 + $73,500

= $401,100

Contribution margin per unit = Selling price per unit - Variable cost per unit

= $670 - $250

= $420

Therefore,

No of unit required to be sold

= [ Contribution required ] : [Contribution margin per unit ]

= $401,100 : 420

= 955 unit