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A company that sells its single product for $40 per unit uses cost-volume-profit analysis in its planning. The company’s after-tax net income for the past year was $1,188,000 after applying an effective tax rate of 40%. The projected costs for manufacturing and selling its single product in the coming year are listed below.  The company has learned that a new direct material is available that will increase the quality of its product. The new material will increase the direct material costs by $3 per unit. The company will increase the selling price of the product to $50 per unit and increase its marketing costs by $1,575,000 to advertise the higher-quality product. The number of units the company has to sell in order to earn a 10% before-tax return on sales would beA. 337,500 units. B. 346,875 units. C. 425,000 units. D. 478,125 units. |