Question
Francois French manufactures cheese, which he normally sells at 20/kg, on which sales commission of 5% is paid. Plant capacity is 7,500 kg/month. Income tax
Francois French manufactures cheese, which he normally sells at 20/kg, on which sales commission of 5% is paid. Plant capacity is 7,500 kg/month. Income tax is levied at 30%. Fixed costs Costs per kg. Plant depreciation 8,000 Direct materials 4 Other plant costs 15,000 Direct labor 2 Corporate salaries 10,000 Var. factory O/H 3 Advertising 3,000 Francois French wants to increase after-tax profits to 35,000. Assuming sufficient demand, which strategy achieves this goal? Sell 7,100 kgs at the present price Pay the dairy 1/kg less and sell 7,500 kgs Sell 8,000 kgs at 20.79/kg Sell 7,500 kgs at the present price and eliminate the sales commission None of the above
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