Benovan Co. reports the following data:Sales (@ unit selling price of P20)Less Variable CostsContribution MarginLess Fixed CostsOperating ProfitP 840,000546.000P 294,000168.000P 126,000Rased on the above data, the following were determined by an accounting staff:========SalesBreakevenSales inBreakevenSales in unitsVolumeUVCVC%UCMCM%DOLpesosThe manager consulted you regarding the effects of the following changes on thecompany's breakeven sales in units, breakeven sales in pesos, Degree of OperatingLeverage (DOL) and Operating Profit. Assuming all other factors remain the same, thefollowing independent proposals were made:1. Increase the sales volume by 25%New SalesVolumeNew BES inunitsNew BES inPesosNew OperatingProfitNewDOL2. Increase the fixed costs by 10%New DOLNew Operating ProfitNew BES in PesosNew BES in units3. Increase the unit variable costs to P14New Operating ProfitNew DOLNew BES in PesosNew BES in unitsBased on the three independent proposals given above, summarize your findings.

The answer in step 2 is based on these formulas- Sales Volume = Total Sales ÷ Unit Selling Price…

Answered: 1. Increase the sales volume by 25% New…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 87PSB

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