Jessica Company produces two models of garage door openers, Standard and Supreme. The company expects to sell 1,800 units of the Standard model and 600 units of the Supreme model (or a sales mix of 3:1). A projected income statement for the firm as a whole for 2021 follows: Jessica Company Projected Income Statement For the Year Ended Dec. 31, 2021 Sales revenue P600,000 Less: Variable costs Contribution margin 360,000 P240,000 Less: Fixed costs (total) 60,000 Net income P180,000 REQUIRED: 1. Determine the break-even sales. 2. Determine the revenue necessary to generate a pre-tax profit of P300,000. 3. Determine the sales revenue necessary to generate an after tax profit of P420,000, if the tax rate is 30%.
Jessica Company produces two models of garage door openers, Standard and Supreme. The company expects to sell 1,800 units of the Standard model and 600 units of the Supreme model (or a sales mix of 3:1). A projected income statement for the firm as a whole for 2021 follows: Jessica Company Projected Income Statement For the Year Ended Dec. 31, 2021 Sales revenue P600,000 Less: Variable costs Contribution margin 360,000 P240,000 Less: Fixed costs (total) 60,000 Net income P180,000 REQUIRED: 1. Determine the break-even sales. 2. Determine the revenue necessary to generate a pre-tax profit of P300,000. 3. Determine the sales revenue necessary to generate an after tax profit of P420,000, if the tax rate is 30%.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter12: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 12.2MBA
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Transcribed Image Text:Exercise 4-17
Jessica Company produces two models of garage door openers, Standard
and Supreme. The company expects to sell 1,800 units of the Standard model
and 600 units of the Supreme model (or a sales mix of 3:1). A projected income
statement for the firm as a whole for 2021 follows:
Jessica Company
Projected Income Statement
For the Year Ended Dec. 31, 2021
Sales revenue
P600,000
Less: Variable costs
360,000
Contribution margin
Less: Fixed costs (total)
P240,000
60,000
P180,000
Net income
REQUIRED:
1. Determine the break-even sales.
2. Determine the revenue necessary to generate a pre-tax profit of P300,000.
3. Determine the sales revenue necessary to generate an after tax profit of
P420,000, if the tax rate is 30%.
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