Answer:
Income before interest and taxes= $111,985.2
Explanation:
Giving the following information:
The company expects to sell 8,000 units, plus or minus 2 percent. The expected variable cost per unit is $11 and the expected fixed costs are $287,000.
The fixed and variable cost estimates are considered accurate within a plus or minus 5 percent range.
The depreciation expense is $68,000.
The tax rate is 32 percent.
The sales price is estimated at $64 a unit, plus or minus 3 percent.
The best-case scenario is the one where the maximum amount of units is sold at a higher price and with the lowest costs.
Best-case scenario:
Units sold= 8000*1.02= 8160 units
Price= $64*1.03= $65.92
Variable cost= 11*0.95= $10.45
Fixed cost= 287000*0.95= 272,650
Sales= 8160* 65.92= 537,907.2
Total variable cost= 85272
Total fixed cost= 272650
Net operating income= 179,985.2
Depreciation= 68000
Income before interest and taxes= $111,985.2
