The RoboMaid Company has high demand for its robot vacuums, however, the company has an annual production capacity of 16,000 units.

A summary of the operating results (in $) for last year is as follows:

The RoboMaid Company expects its regular sales to be 12,000 units sold equally over the next year. The company must evaluate the following proposal:

Over the next year, RoboMaid Company can use the extra capacity not needed for its expected regular sales to produce 4,000 robot vacuums which can be sold for $1,700 each, with a variable cost of $540 per vacuum. This option will result in additional fixed costs of $470,000 over the year.

If the company decides to accept the proposal, calculate the total operating profitfor the next year.

Question 22 options:

	$6,250,000
	$13,050,000
	$10,900,000
	$10,980,000