Determine the total income of company

Reference no: EM1352232

A manufacturer of electronic products provides the following information relating to revenues, costs and plant capacity. The purpose is to find the answers to the questions that are of primary concern to the company. The data are:

The capacity of the plant (Plant Capacity) is 55,000 units variable cost per unit (Variable Cost) is $ 18 The benefit obtained in each unit sold (Unit Contribution Margin) is $ 22 The total fixed costs (Total Fixed Cost) are $550,000 Tax rate (Tax Rate) 15% The expected gain (Desired Profit) is $85,000.

Question 4
What is the total income the company must have to cover fixed costs, variables, expected profit and taxes?

Question 9
If the company wanted to increase the selling price of each unit, what price should be set to achieve the same total income found in question number 4 so only need to use 50% of the total plant capacity.

Question 10
In the case alleged that the company could use the excess plant capacity 50% to the price established in the question number 9 what would be the additional revenue that would:

A) before taxes

B) after tax

Reference no: EM1352232

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