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Crest Industries 80

Price: $1.99

Crest Industries sells a single model of satellite radio receivers for use in the home. The radios have
the following price and cost characteristics:

Sales price  80 per radio
Variable costs  32 per radio
Fixed costs  360,000 per month 

Crest is subject to an income tax rate of 40 percent.

a. How many receivers must Crest sell every month to break even?
b. How many receivers must Crest sell to earn a monthly operating profit of $90,000 after taxes?

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