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Answer :
Final answer:
This year's net income for the manufacturer will be $1,924,000.00.
Explanation:
To calculate the net income, we need to subtract the total costs from the revenue.
Given:
- Selling price per unit: $1,600.00
- Variable cost per unit: $680.00
- Fixed costs: $1,940,000.00
- Expected sales volume: 4,200 units
First, let's calculate the total revenue:
Total Revenue = Selling price per unit * Expected sales volume
Total Revenue = $1,600.00 * 4,200 units
Total Revenue = $6,720,000.00
Next, let's calculate the total variable costs:
Total Variable Costs = Variable cost per unit * Expected sales volume
Total Variable Costs = $680.00 * 4,200 units
Total Variable Costs = $2,856,000.00
Now, let's calculate the total costs:
Total Costs = Fixed costs + Total Variable Costs
Total Costs = $1,940,000.00 + $2,856,000.00
Total Costs = $4,796,000.00
Finally, let's calculate the net income:
Net Income = Total Revenue - Total Costs
Net Income = $6,720,000.00 - $4,796,000.00
Net Income = $1,924,000.00
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