Use the Following Information to Answer Questions

Multiple Choice

Use the following information to answer questions
Reliable Furniture manufactures recliners selling for $500 each. Variable costs per unit are $175 for direct material, $125 for direct labor, $35 for variable production overhead, and $15 for variable selling and administrative costs. Annual fixed costs are $200,000 for production overhead and $100,000 for selling and administrative costs. The company applies fixed production overhead to recliners based on a capacity of 20,000 units per year.
-If the company wants to earn a before-tax profit of $600,000, how many recliners must be sold?

A) 1,200 units
B) 1,800 units
C) 4,000 units
D) 4,500 units
E) 6,000 units