A company manufactures 1,000,000 units of a product yearly. A new design of the product will reduce materials cost by 12% but will increase processing cost by 2%. If material cost is 1.20Php/unit and processing will cost 0.40Php/unit, how much does the company saves yearly for making changes in the equipment? a. 130,000Php b. 136,000Php c. 137,500Php d. 140,000Php e. None of the above

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 9E: Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs...
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4. A company manufactures 1,000,000 units of a product yearly. A new design of the product will reduce
materials cost by 12% but will increase processing cost by 2%. If material cost is 1.20Php/unit and
processing will cost 0.40Php/unit, how much does the company saves yearly for making changes in
the equipment?
a. 130,000Php
b. 136,000Php
c. 137,500Php
d. 140,000Php
e. None of the above

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