b) Assume the the company would like an after tax profit of $150,000 and is subject to a tax rate of 20 40%. (2 marks) 21 22 Desired profit after taxes (desired net income) $ 150,000 23 Tax rate 40% 24 25 Calculate the following: (1 mark each) 26 Desired before-tax profit (desired operating income) 27 Units to sell to produce a profit of $150,000 after taxes 28 29 c) Refer to the original data. (7 marks) The company is trying to improve profit and is considering two options: 7 Option 1. Increase selling price by $1.00. Assume there is no change to how many units are sold, variable costs or fixed costs. Only selling price per unit changes from the original data. OR Option 2. Refer back to original data (this is independent of Option 1). Increase the number of units sold by 5% by spending $10,000 on an advertising campaign. There is no change to selling price and variable cost per unit, use the original data for these, only sales quantity and fixed costs change from the original data. b) Assume the the company would like an after tax profit of $150,000 and is subject to a tax rate of 20 40%. (2 marks) 21 22 Desired profit after taxes (desired net income) $ 150,000 23 Tax rate 40% 24 25 Calculate the following: (1 mark each) 26 Desired before-tax profit (desired operating income) 27 Units to sell to produce a profit of $150,000 after taxes 28 29 c) Refer to the original data. (7 marks) The company is trying to improve profit and is considering two options: 7 Option 1. Increase selling price by $1.00. Assume there is no change to how many units are sold, variable costs or fixed costs. Only selling price per unit changes from the original data. OR Option 2. Refer back to original data (this is independent of Option 1). Increase the number of units sold by 5% by spending $10,000 on an advertising campaign. There is no change to selling price and variable cost per unit, use the original data for these, only sales quantity and fixed costs change from the original data