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Consider the following cost and pricing data of ABC Corp. on its Product X: Price: P120.00.per unit Profit Contribution: P90.00 Proposed additional Cost: P3 per unit (for quality improvement) Current Profits: P2.4 million Sales: 100,000 units. A. Assuming that average variable costs are constant at all output levels, find ABC Corp.’s total cost function before the proposed change. B. Calculate the total cost function if the quality improvement is implemented. UNANSWERED SUB-PARTS C. Calculate ABC Corp.’s break-even output before and after the change, assuming it cannot increase its price. D. Calculate the increase in sales that would be necessary with the quality improvement to increase profits to P2.7 million

Consider the following cost and pricing data of ABC Corp. on its Product X: Price: P120.00.per unit Profit Contribution: P90.00 Proposed additional Cost: P3 per unit (for quality improvement) Current Profits: P2.4 million Sales: 100,000 units. A. Assuming that average variable costs are constant at all output levels, find ABC Corp.’s total cost function before the proposed change. B. Calculate the total cost function if the quality improvement is implemented. UNANSWERED SUB-PARTS C. Calculate ABC Corp.’s break-even output before and after the change, assuming it cannot increase its price. D. Calculate the increase in sales that would be necessary with the quality improvement to increase profits to P2.7 million

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 4E: Using the data in E4-2 and spreadsheet software, determine: The variable cost per unit, the total...
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Consider the following cost and pricing data of ABC Corp. on its Product X:
Price: P120.00.per unit
Profit Contribution: P90.00
Proposed additional Cost: P3 per unit (for quality improvement)
Current Profits: P2.4 million
Sales: 100,000 units.


A. Assuming that average variable costs are constant at all output levels, find
ABC Corp.’s total cost function before the proposed change.
B. Calculate the total cost function if the quality improvement is implemented.

UNANSWERED SUB-PARTS
C. Calculate ABC Corp.’s break-even output before and after the change, assuming it cannot increase its price.
D. Calculate the increase in sales that would be necessary with the quality improvement to increase profits to P2.7 million

= bartleby Q Search for textbooks, step-by-step explanations to homework questions, E Ask an Expert e Q&A Library Problem Solving.Determine for what is asked. S... Expert Answer Formula Sales- Variable Cost = Contribution Net Profits = Total Contribution - Fixed Costs Breakeven Point = (Fixed Costs / Contribution per Unit) Note: Since you have posted a question with multiple sub-parts, we will solve first three subparts for you. To get remaining sub-part solved please repost the complete question and mention the sub-parts to be solved Part-A
Transcribed Image Text:= bartleby Q Search for textbooks, step-by-step explanations to homework questions, E Ask an Expert e Q&A Library Problem Solving.Determine for what is asked. S... Expert Answer Formula Sales- Variable Cost = Contribution Net Profits = Total Contribution - Fixed Costs Breakeven Point = (Fixed Costs / Contribution per Unit) Note: Since you have posted a question with multiple sub-parts, we will solve first three subparts for you. To get remaining sub-part solved please repost the complete question and mention the sub-parts to be solved Part-A
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