The following data pertains to XYZ Company for the current year of operations.

                                                 Total         Per Unit

Sales (40,000 units)                        $1,000,000         $25

Raw materials                                 160,000           4

Direct labor                                  280,000             7

Factory overhead:      

Variable                                       80,000             2

Fixed                                         360,000   

Selling and general expenses:      

Variable                                      120,000           3

Fixed                                         225,000   

How many units does XYZ Company need to produce and sell to make a before-tax profit of 10% of sales?

A. 25,000 units.

B. 36,562 units.

C. 65,000 units.

D. 90,000 units.