Answer:
To calculate the net income at full capacity, we need to consider the total revenue, total variable costs, and total fixed costs.
Total revenue at full capacity:
The plant capacity is 1000 units per month, so in a year, it would be 1000 units/month * 12 months = 12,000 units.
Total revenue = Number of units * Price per unit = 12,000 units * $500 = $6,000,000
Total variable costs at full capacity:
Variable cost per camera = $225
Total variable costs = Number of units * Variable cost per camera = 12,000 units * $225 = $2,700,000
Total fixed costs at full capacity:
Given fixed costs for the year are $2.16 million, and they increase by 10%:
New fixed costs = $2.16 million + ($2.16 million * 10%) = $2.16 million + $216,000 = $2,376,000
Net income at full capacity:
Net income = Total revenue - Total variable costs - Total fixed costs
Net income = $6,000,000 - $2,700,000 - $2,376,000 = $924,000
Therefore, the net income at full capacity would be $924,000.