ABC Corporation manufactures a certain product that sells for P5,000 each. The company’s maximum production capacity is 360 units per year. At present it is able to produce and sell 280 units a year. The cost to manufacture each product is P2,400 and the fixed operating cost per year is P520,000. 1. What is the break – even sales volume of the product per year? 2. What is the profit per year based on the present production – sales status? 3. What is the loss if only 150 units were produced and sold in a year?

ABC Corporation manufactures a certain product that sells for P5,000 each. The company’s maximum production capacity is 360 units per year. At present it is able to produce and sell 280 units a year. The cost to manufacture each product is P2,400 and the fixed operating cost per year is P520,000. 1. What is the break – even sales volume of the product per year? 2. What is the profit per year based on the present production – sales status? 3. What is the loss if only 150 units were produced and sold in a year?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 7E

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