Blanchard Company’s sales manager (in Exercise 21-10) predicts that annual sales of the company’s product will soon reach 40,000 units and its price will increase to $ 200 per unit. According to the production manager, the variable costs are expected to increase to $ 140 per unit but fixed costs will remain at $ 562,500. The income tax rate is 20%. What amounts of pretax and after- tax income can the company expect to earn from these predicted changes?
In Exercise 21-10, Blanchard Company manufactures a single product that sells for $ 180 per unit and whose total variable costs are $ 135 per unit. The company’s annual fixed costs are $ 562,500.

  • CreatedNovember 29, 2013
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