Dynamic Designs has fixed costs of $380,000 and produces one graphic arts product with a selling price of $80 and variable costs of $42 per unit. The firm's maximum production capacity is 20,000 units, and it anticipates selling 15,000 units.
a. What will be Dynamic's expected operating income based on 15,000 units sold?
b. If sales increase to the firm's maximum production capacity, what will be its operating income?
c. What will sales revenue levels have to be to reach management's operating income goal of $342,000?
d. How much will this be in required unit sales?

Question

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The Answer of Dynamic Designs has fixed costs of $380,000 and produces one graphic arts product with a selling price of $80 and variable costs of $42 per unit. The firm's maximum production capacity is 20,000 units, and it anticipates selling 15,000 units.
a. What will be Dynamic's expected operating income based on 15,000 units sold?
b. If sales increase to the firm's maximum production capacity, what will be its operating income?
c. What will sales revenue levels have to be to reach management's operating income goal of $342,000?
d. How much will this be in required unit sales?

Dynamic Designs Has Fixed Costs of $380,000 and Produces One