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A company sold 25,000 units of product last year. The contribution margin per unit was ₱2, and fixed expenses totaled ₱40,000 for the year. These fixed expenses are expected to increase to ₱45,000 this year, but the contribution margin per unit will remain unchanged at ₱2. How many units must be sold to earn the same net operating income (ignoring tax) as it was earned last year? a. 22,500 b. 27,500 c. 35,000 d. 2,500 e. 20,000

A company sold 25,000 units of product last year. The contribution margin per unit was ₱2, and fixed expenses totaled ₱40,000 for the year. These fixed expenses are expected to increase to ₱45,000 this year, but the contribution margin per unit will remain unchanged at ₱2. How many units must be sold to earn the same net operating income (ignoring tax) as it was earned last year? a. 22,500 b. 27,500 c. 35,000 d. 2,500 e. 20,000

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 14EB: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are...
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A company sold 25,000 units of product last year. The contribution margin per unit was ₱2, and fixed expenses totaled ₱40,000 for the year. These fixed expenses are expected to increase to ₱45,000 this year, but the contribution margin per unit will remain unchanged at ₱2. How many units must be sold to earn the same net operating income (ignoring tax) as it was earned last year? a. 22,500 b. 27,500 c. 35,000 d. 2,500 e. 20,000
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