Question No. 1:

Part - A:As per Federal Budget 2019-2020 presented by Government of Pakistan, following slabs and income tax rates will be applicable for salaried persons for the year 2019-2020:

Taxable Income Tax Rate

600,000 0%

600,000 - 1,200,000 5% of the amount exceeding 600,000

1,200,000 - 1,800,000 30,000 + 10% of the amount exceeding 1,200,000

1,800,000 - 2,500,000 90,000 + 15% of the amount exceeding1,800,000

2,500,000 - 3,500,000 195,000 + 17.5% of the amount exceeding 2,500,000

3,500,000 - 5,000,000 370,000 + 20% of the amount exceeding 3,500,000

5,000,000 - 8,000,000 670,000 + 22.5% of the amount exceeding 5,000,00

8,000,000 - 12,000,000 1,345,000 + 25% of the amount exceeding 8,000,000

12,000,000 - 30,000,000 2,345,000 + 27.5% of the amount exceeding 12,000,000

30,000,000 - 50,000,000 7,295,000 + 30% of the amount exceeding 30,000,000

50,000,000 - 75,000,000 13,295,000 + 32.5% of the amount exceeding 50,000,000

More than 75,000,000 21,420,000 + 35% of the amount exceeding 75,000,000

a)Create a Mathematical Model that represents the aforementioned information to calculate the annual income tax of each slab.

b) How much annual income tax you will have to pay if your monthly taxable income is PKR. 250,000

Part - B:

A Leading manufacturer of Action Figures is about to introduce four new Action Figures. The accompanying table summarizes price and cost data, combined fixed costs equal $450,000. A marketing research study predicts that for each unit sold of Noyan, 2 units of Dogan, 3 units of Bamsi and 4 units of Turgut will be sold.

Action figures

Turgut Bamsi Dogan Noyan

selling price in dollar 30 24 22 18

variable cost / unit (in dollar) 12 11 10 11

a)How many product mix units must be sold to break even?

b)How does it translate into sales of individual games?