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A business has the capacity to manufacture 730 electronic components per annum that it sells for $500 each. The variable costs are $260 per component and the fixed costs are $102.000 per year

A business has the capacity to manufacture 730 electronic components per annum that it sells for $500 each. The variable costs are $260 per component and the fixed costs are $102.000 per year

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A business has the capacity to manufacture 730 electronic components per annum that it sells for $500 each. The variable costs are $260 per component and the fixed costs are $102,000 per year. a. What quantity should it sell in a year to have a net income of $40,000 per year? Round up to the next whole number b. What is the net income per year at capacity? Round to the nearest cent c. What is the quantity that it needs to sell to have a net income of $40,000 per year if the selling price of the component is reduced by 12.00% and variable costs are increased by 12.00%? Round up to the next whole number
Transcribed Image Text:A business has the capacity to manufacture 730 electronic components per annum that it sells for $500 each. The variable costs are $260 per component and the fixed costs are $102,000 per year. a. What quantity should it sell in a year to have a net income of $40,000 per year? Round up to the next whole number b. What is the net income per year at capacity? Round to the nearest cent c. What is the quantity that it needs to sell to have a net income of $40,000 per year if the selling price of the component is reduced by 12.00% and variable costs are increased by 12.00%? Round up to the next whole number
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