Variable cost: Direct labour Direct materials Variable overhead

Total variable costs Fixed costs:

12 per light switch 5 per light switch 3 per light switch

20 per light switch

Manufacturing 50,000 Selling 30,000 Administrative 80,000

Total fixed costs 160,000

30 per light switch Expected sales, 2021 (30,000 light switches) 900,000

ABC Ltd. has set the sales target for 2022 at a level of 1,200,000 (or 40,000 light switches). To attain this target, the company plans to spend an additional selling expense of 50,000 for advertising, with all other costs and tax rate remaining constant.

(i) Calculate the after-tax profit for 2022.