Tabitha

Tabitha manufactures a product that sells very well. The capacity of her facility is 241,000 units per year. The fixed costs are $122,000 per year and the variable costs are $11 per unit. The product currently sells for $17.

a. What total revenue is required for a net income of $397,000 per year?

b. If sales were at 55% of the capacity and the variable costs decreased by 25%, what would be the net income per year?

Result

a =  3170000
b =  143100

Solution:


397000 = a - (122000+11*241000)

a = 3170000

a = 3170000

Calculated by our simple equation calculator.

b = 17 * 241000 * 0.55 - (122000 + 11*(1-0.25)*241000)

b = 143100

b = 143100

Calculated by our simple equation calculator.







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