A Manufacturing Company Is Considering Producing a New Product

Multiple Choice

A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1,500 units per month, and sell the product for $125 each. What would be the net income at 90% capacity?

A) $10,000
B) $15,000
C) $12,750
D) $12,225
E) $16,000