M Studios Retails Their Own Brand of Camera That They

Multiple Choice

M Studios retails their own brand of camera that they manufacture in their plant for $500. The plant capacity is 1,000 units per month and variable costs are $225 per camera. Total fixed costs for the year are $2.16 million. If fixed costs increase by 10%, what will be the net income at full capacity?

A) $85,000
B) $75,000
C) $80,000
D) $77,000
E) $75,500