Dennis Company sells a product for P20, variable costs are P8 per unit, and fixed costs are P32,000. a. What is Dennis' break-even point in units? b. Find the selling price that Dennis must charge to earn an P8,000 profit selling 1,600 units. c. Dennis is considering new equipment that would increase fixed costs by P2,000 while reducing unit variable costs by P1.60 per unit. Find the sales level where Dennis is indifferent between the two cost structures.
Dennis Company sells a product for P20, variable costs are P8 per unit, and fixed costs are P32,000. a. What is Dennis' break-even point in units? b. Find the selling price that Dennis must charge to earn an P8,000 profit selling 1,600 units. c. Dennis is considering new equipment that would increase fixed costs by P2,000 while reducing unit variable costs by P1.60 per unit. Find the sales level where Dennis is indifferent between the two cost structures.
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....
Related questions
Question
Dennis Company sells a product for P20, variable costs are P8 per unit, and fixed costs are P32,000.
a. What is Dennis' break-even point in units?
b. Find the selling price that Dennis must charge to earn an P8,000 profit selling 1,600 units.
c. Dennis is considering new equipment that would increase fixed costs by P2,000 while reducing unit variable costs by P1.60 per unit. Find the sales level where Dennis is indifferent between the two cost structures.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning