C. If tax rates are 24%, how much net income will you make if you sell 1,000 cans? You are considering offering a $1.00 off coupon for each can to increase sales. You think sales will increase to 1,500 cans per month (assuming each can will be purchased with a coupon). A fixed coupon processing fee of $288 will be incurred each month if you choose this strategy. D. How many cans will you need to sell each month to breakeven with the coupon strategy? Assume sales commissions will still be based on the $12.00 "list price." E. How much monthly operating income will you have if you sell 1,500 cans each month with this coupon strategy?
C. If tax rates are 24%, how much net income will you make if you sell 1,000 cans? You are considering offering a $1.00 off coupon for each can to increase sales. You think sales will increase to 1,500 cans per month (assuming each can will be purchased with a coupon). A fixed coupon processing fee of $288 will be incurred each month if you choose this strategy. D. How many cans will you need to sell each month to breakeven with the coupon strategy? Assume sales commissions will still be based on the $12.00 "list price." E. How much monthly operating income will you have if you sell 1,500 cans each month with this coupon strategy?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please solve C, D, and E.
Expert Solution
Step 1 Introduction
The operating income is calculated as difference between sales and total cost. The operating income can be calculated as difference between contribution margin and fixed cost. The net income is calculated as difference between operating income and income tax expenses.
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