Laurel Company manufactures a high-quality wooden birdhouse that sells
for $25 per unit. Variable costs are $8 per unit, and fixed costs total
$130,000. The company sold 40,000 birdhouses to customers during 2018.
The president of Laurel Company believes the following changes should
be made in 2019:
1. the selling price of the birdhouse should be reduced by 20%
2. increase advertising by $35,000
Assume these changes are made. Calculate the number of units Laurel
Company must sell in 2019 in order to earn a target profit equal to
16% of sales.