Final answer:
The number of units sold by Holland Corporation last year was calculated by finding the before-tax income from the after-tax net income, adding it to the fixed costs, and dividing by the contribution per unit. The final rounded up figure is 17,167 units.
Step-by-step explanation:
To determine how many units Holland Corporation sold last year, we need to take into account both the after-tax net income and the contribution per unit to fixed costs and net income. Based on the information provided, the after-tax net income was $182,000. Since the income tax rate was 35%, we need to find the before-tax income, which is the amount that, after being taxed at 35%, results in the after-tax net income of $182,000.
The before-tax income can be found using the formula:
Before-tax Income = After-tax Income / (1 - Tax Rate)
Before-tax Income = $182,000 / (1 - 0.35)
Before-tax Income = $182,000 / 0.65
Before-tax Income = $280,000
We add this to the fixed costs to find the total amount needed to break even:
Total Break-even Amount = Fixed Costs + Before-tax Income
Total Break-even Amount = $750,000 + $280,000
Total Break-even Amount = $1,030,000
Divide this by the contribution per unit to find the number of units sold:
Number of Units Sold = Total Break-even Amount / Contribution per Unit
Number of Units Sold = $1,030,000 / $60
Number of Units Sold = 17,166.67
Since we round up to the nearest unit, the final answer is 17,167 units sold last year.