A company makes a single product that it sells for P16 per unit. Fixed costs are P76,800 per month and the product has a contribution margin ratio of 40%. If the company's actual sales are P240,000, its margin of safety is P

A company makes a single product that it sells for P16 per unit. Fixed costs are P76,800 per month and the product has a contribution margin ratio of 40%. If the company's actual sales are P240,000, its margin of safety is P

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7MC: Company A wants to earn $5,000 profit in the month of January. If their fixed costs are $10,000 and...

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

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A company makes a single product that it sells for P16 per unit. Fixed costs are P76,800 per month and the
product has a contribution margin ratio of 40%. If the company's actual sales are P240,000, its margin of
safety is P

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