Ashely,

I will take the BEC in July 1 too.

Good Luck!

Ashely wrote: I got 7667 units too. Assume company has to sell x units FC=$200,000 c.m.=$200/unit after tax income=$1,000,000 tax rate=0.25 then: 200x = FC + 1,000,000/(1-tax rate) 200x=200,000+ 1000,000/0.75 so: x=7667 (units) If I am wrong, please correct me.

I got the same answer as you but BISK gave the explanation below.

A modified cost-volume-profit formula is required to include the impact of income taxes.  Units for a stated after-tax net income = [fixed costs + (after-tax net income) / (1 – tax rate)] / contribution margin per unit = [$200,000 + ($1,000,000) / (1 – 0.25)] / $200 / unit = 4,750 units

I used the same formula,but did not come up with their answers.

This shows that they published their textbook without updating some of their questions

Thanks; now I know I was not on the wrong track.

Ashely wrote: huamao,thanks, and good luck to you as well!

THanks and good luck to you too.