Elephant Company sells bags with a selling price of P10,000 per bag and a variable cost of P4,000 per unit. Elephant's monthly fixed expense is P3,000,000. Let W be the number of units manufactured a. Construct the total cost function b. Construct the profit function c. Compute the contribution margin ratio.
Elephant Company sells bags with a selling price of P10,000 per bag and a variable cost of P4,000 per unit. Elephant's monthly fixed expense is P3,000,000. Let W be the number of units manufactured a. Construct the total cost function b. Construct the profit function c. Compute the contribution margin ratio.
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter1: Expressions And Functions
Section1.5: Descriptive Modeling And Accuracy
Problem 29PFA
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Question
Elephant Company sells bags with a selling price of P10,000 per bag and a
variable cost of P4,000 per unit. Elephant's monthly fixed expense is P3,000,000.
Let W be the number of units manufactured
a. Construct the total cost function
b. Construct the profit function
c. Compute the contribution margin ratio.
d. Compute total revenues needed to break even.
e. Determine the breakeven point in units sold and sales in pesos.
f. Compute required sales needed to achieve a target net income of P1,500,000
in units sold and sales in pesos
g. Determine margin of safety if current sales is P8,750,000
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