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.