Hyundai is considering opening a plant in two neighboring states. Option 1: One state has a corporate tax rate of 10 percent. If operated in this state, the plant is expected to generate $1,000,000 pretax profit Option 2: The other state has a corporate tax rate of 2 percent. If operated in this state, the plant is expected to generate $930,000 of pretax profit. a. What is the after state taxes profit in the state with the 10% tax rate? Answer is complete and correct. After state taxes profit $ 900,000 b. What is the after state taxes profit in the state with the 2% tax rate? Answer is complete but not entirely correct. After state taxes profit 744,000 c. Which state should Hyundai choose? Option 1 Option 2 Orie and Jane, husband and wife, operate a sole proprietorship. They expect their taxable income next year to be $450,000, of which $250,000 is attributed to the sole proprietorship. Orie and Jane are contemplating incorporating their sole proprietorship. (Use the tax rate schedule.) a. Using the married-joint tax brackets and the corporate tax rate, find out how much current tax this strategy could save Orie and Jane. (Round your intermediate calculations and final answer to nearest whole dollar amount.) Answer is complete but not entirely correct. Current tax saved $ 19,800 b. How much of the income should be converted into corporate income to maximize tax savings? Answer is not complete. Income left 2020 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: $ 0 $ 9.875 $ 9.875 $ 40,125 $ 40,125 $ 85.525 $ 85,525 $163,300 $ 163,300 $207,350 $207,350 $518,400 $518,400 The tax is: 10% of taxable income $987 50 plus 12% of the excess over $9.875 $4,617 50 plus 22% of the excess over $40,125 $14,605 50 plus 24% of the excess over $85 525 $33,271 50 plus 32% of the excess over $163,300 S47367 50 plus 35% of the excess over $207,350 $156,235 plus 37% of the excess over $518,400 Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: The tax is: $ 0 $ 19,750 10% of taxable income $ 19,750 $ 80.250 $1.975 plus 12% of the excess over $19,750 $ 80.250 $171,050 $9.235 plus 22% of the excess over $80.250 $171,050 $326,600 $29.211 plus 24% of the excess over $171,050 $326,600 $414,700 $66 543 plus 32% of the excess over $326,600 $414,700 $622,050 $94.735 plus 35% of the excess over $414,700 $622,050 $167,307 50 plus 37% of the excess over $622,050 Schedule Z-Head of Household If taxable income is over: But not over: The tax is: $ 0 $ 14,100 10% of taxable income $ 14,100 $ 53,700 $1.410 plus 12% of the excess over $14,100 $ 53,700 $ 85,500 $6,162 plus 22% of the excess over $53,700 $ 85,500 $163,300 $13,158 plus 24% of the excess over $85 500 $163,300 $207,350 $31,830 plus 32% of the excess over $163,300 $207,350 $518,400 $45,926 plus 35% of the excess over $207 350 $518,400 $154,793.50 plus 37% of the excess over $518,400 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: The tax is: $ 0 $ 9,875 10% of taxable income $ 9.875 $ 40,125 $987.50 plus 12% of the excess over $9.875 $ 40,125 $ 85,525 $4.617-50 plus 22% of the excess over $40,125 S 85 525 $163,300 $14,605.50 plus 24% of the excess over $85.525 $163,300 $207 350 $33,271.50 plus 32% of the excess over $163,300 $207,350 $311,025 $47.367 50 plus 35% of the excess over $207 350 $311,025 583,653.75 plus 37% of the excess over $311,025 Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price Variable costs Tixed costs 16 per unit 8 per unit 30,000 per month Assume that the projected number of units sold for the month is 6,000. Consider requirements (b). (d, and (c) independently of each other. Required: a. What will the operating profit be? b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? Complete this question by entering your answers in the tabs below. Requires A Required B Required Required D What will the operating profit be? Operating profit $ 402,000 Required B > Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics Sales price Variable costs Fixed costs 16 per unit 8 per unit 30,000 per month Assume that the projected number of units sold for the month is 6,000. Consider requirements (b). (d, and (independently of each other. Required: a. What will the operating profit be? b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? Complete this question by entering your answers in the tabs below. Required A Requided B Required C Required D What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? (Do not round intermediate calculations.) Sales price decreases by 10 percent Sales price increases by 20 percent: Operating profit Operating profit by by Berby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. $ Sales price Variable costs Pixed costs 16 per unit 8 per unit 30,000 per month Assume that the projected number of units sold for the month is 6,000. Consider requirements (b).(d, and (independently of each other. Required: a. What will the operating profit be? b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? Complete this question by entering your answers in the tabs below. Required A Required B Required Required D What is the impact on operating profit If variable costs per unit decrease by 10 percent? Increase by 20 percent? (Do not round intermediate calculations.) Variable costs per unit decrease by 10 percent: Variable costs per unit increase by 20 percent: Operating profit Operating profit by by Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. $ Sales price Variable costs Fixed costs 16 per unit 8 per unit 30,000 per month Assume that the projected number of units sold for the month is 6,000. Consider requirements (b), (c), and (c) independently of each other. Required: a. What will the operating profit be? b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? Complete this question by entering your answers in the tabs below. Required A Required B Required Required Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? (Do not round intermediate calculations.) Operating profit by