a. Davao had a potential foreign customer that has offered to buy 1,500 tons at 450 per ton. Assume that all of Davao's costs would bet at the same levels and rates as last year. What net incomr after taxes would Davao make if it took this order and rejected some business from regular customers so as not to exceed capacity? b. Without prejudice to your answers to peevious questions, and assume that Davao plans to market its product in a new territory. Davao estimated that an advertising and promotion program costing 61,500 annually would need to be undertaken for the next two or three years. In addition l, a 25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao's current after-tax income of 94,500.
a. Davao had a potential foreign customer that has offered to buy 1,500 tons at 450 per ton. Assume that all of Davao's costs would bet at the same levels and rates as last year. What net incomr after taxes would Davao make if it took this order and rejected some business from regular customers so as not to exceed capacity?
b. Without prejudice to your answers to peevious questions, and assume that Davao plans to market its product in a new territory. Davao estimated that an advertising and promotion program costing 61,500 annually would need to be undertaken for the next two or three years. In addition l, a 25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao's current after-tax income of 94,500.
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