Apollo Company manufactures a single product that sells for $175 per unit and whose total variable costs are $132 per unit. The company's annual fixed costs are $635,000. The sales manager predicts that annual sales of the company's product will soon reach 40,500 units and its price will increase to $205 per unit. According to the production manager, the variable costs are expected to increase to $145 per unit but fixed costs will remain $635,000. The income tax rate is 20%.
What amounts of pretax and after-tax income can the company expect to earn from these predicted changes? (Omit the "$" sign in your response.)
- Pretax income $
- After-tax income $