2C2M ELGERS COMPANY PRODUCES VALVES FOR THE PLUMBING INDUSTRY. ELGER...

259.

CSO: 2C2g

LOS: 2C2m

Elgers Company produces valves for the plumbing industry. Elgers’ per unit sales price

and variable costs are as follows.

Sales price

$12

Variable costs

8

Elgers’ practical plant capacity is 40,000 units. Elgers’ total fixed costs aggregate $48,000

and it has a 40% effective tax rate. The maximum net profit that Elger can earn is

a.

$48,000.

b.

$67,200.

c.

$96,000.

d.

$112,000.