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6-15 A company has direct production costs equal to 50 percent of total annual sales, and fixed charges, overhead, and general expenses equal to $200,000. If management proposes to increase present annual sales of $800,000 by 30 percent with a 20 percent increase in fixed charges, overhead, and general expenses, what annual sales amount is required to provide the same gross earnings as the present plant operation? What would be the net profit if the ex- panded plant were operated at full capacity with an income tax on gross earnings of 35 per- cent? What would be the net profit for the enlarged plant if total annual sales remained at $800,000? What would be the net profit for the enlarged plant if the total annual sales actually decreased to $700,000?

6-15 A company has direct production costs equal to 50 percent of total annual sales, and fixed charges, overhead, and general expenses equal to $200,000. If management proposes to increase present annual sales of $800,000 by 30 percent with a 20 percent increase in fixed charges, overhead, and general expenses, what annual sales amount is required to provide the same gross earnings as the present plant operation? What would be the net profit if the ex- panded plant were operated at full capacity with an income tax on gross earnings of 35 per- cent? What would be the net profit for the enlarged plant if total annual sales remained at $800,000? What would be the net profit for the enlarged plant if the total annual sales actually decreased to $700,000?

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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6-15 A company has direct production costs equal to 50 percent of total annual sales, and fixed charges, overhead, and general expenses equal to $200,000. If management proposes to increase present annual sales of $800,000 by 30 percent with a 20 percent increase in fixed charges, overhead, and general expenses, what annual sales amount is required to provide the same gross earnings as the present plant operation? What would be the net profit if the ex- panded plant were operated at full capacity with an income tax on gross earnings of 35 per- cent? What would be the net profit for the enlarged plant if total annual sales remained at $800,000? What would be the net profit for the enlarged plant if the total annual sales actually decreased to $700,000?
Transcribed Image Text:6-15 A company has direct production costs equal to 50 percent of total annual sales, and fixed charges, overhead, and general expenses equal to $200,000. If management proposes to increase present annual sales of $800,000 by 30 percent with a 20 percent increase in fixed charges, overhead, and general expenses, what annual sales amount is required to provide the same gross earnings as the present plant operation? What would be the net profit if the ex- panded plant were operated at full capacity with an income tax on gross earnings of 35 per- cent? What would be the net profit for the enlarged plant if total annual sales remained at $800,000? What would be the net profit for the enlarged plant if the total annual sales actually decreased to $700,000?
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