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Product engineers and marketers estimate that the variable cost of manufacturing a new...
Topics: Business, Math, Net Income
Product engineers and marketers estimate that the variable cost of manufacturing a new "genie" will be $55 per unit. The selling price is to be $130. The fixed costs applicable are $1,240,000 per year and the capacity per year is 60,000 units. Calculate the maximum net profit.
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High School Teacher
To achieve the maximum profit (also called net income), the business will operate at full capacity. The selling price is measured against the fixed and variable costs where `CP= $1240000 + ($55 times 60000)= 4540000` and`SP=$130 times 60 000= 7800000`
`= $3 260 000`
The maximum net profit is $3 260 000
Posted by durbanville on October 11, 2013 at 5:34 AM (Answer #1)
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