Blanchard Company manufactures a single product that sells for $190 per unit and whose total variable costs are $150 per unit. The company's annual fixed costs are $635,000. The sales manager predicts that annual sales of the company's product will soon reach 40,500 units and its price will increase to $205 per unit. According to the production manager, variable costs are expected to increase to $145 per unit, but fixed costs will remain at $635,000. The income tax rate is 20%. What amounts of pretax and after-tax income can the company expect to earn from these predicted changes?
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Home » Business » Blanchard Company manufactures a single product that sells for $190 per unit and whose total variable costs are $150 per unit. The company's annual fixed costs are $635,000.