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 annually, 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 annually?

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

Correct answer:

a =  3170000
b =  143100

Step-by-step explanation:


397000 = a - (122000+11·241000)

a = 3170000


a = 3170000/1 = 3170000

a = 3170000

Our simple equation calculator calculates it.

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

b = 143100


b = 143100/1 = 143100

b = 143100

Our simple equation calculator calculates it.



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