“Madengrad Company manufactures a single electronic product called Precisionmix. This unit is a batch-density monitoring device attached to large industrial mixing machines used in flour, rubber, petroleum, and chemical manufacturing. Precisionmix sells for $900 per unit. The following variable costs are incurred to produce each Precisionmix device. Direct labor $180 Direct materials 240 Factory overhead 105 Total variable production costs 525 Marketing costs 75 Total variable costs $600 ÍÍÍÍ Madengrad’s annual fixed costs are $6,600,000. Except for an operating loss incurred in the year of incorporation, the firm has been profitable over the last five years. 81. If Madengrad Company achieves a sales and production volume of 8,000 units, the annual before-tax income (loss) will be a. $(4,200,000) b. $1,780,000 c. $(2,520,000) d. $(420,000) e. $2,400,000”,”1The annual (before tax) income (loss):Total Cost = Variable (8,000 x 600) = $4,800,000 Fixed 6,600,000Total 11,400,000Income = Sales – Total Cost = (8,000 x 900) – 11,400,000 = 7,200,000 – 11,400,000 = (4,200
000)”