product sells for P60 per unit and has a CM ratio of 40%. The company's fixed expenses are P360,000 per year. The company plans to sell 17,000 bookbags this year. Required: a. What are the variable expenses per unit? b. Using the equation method: 1. What is the break-even point in units and in sales dollars? 2. What sales level in units and in sales dollars is required to earn an annual profit of P90,000? 3. Assume that through negotiation with the manufacturer the Super Sales Company is able to reduce its variable expenses by P3 per unit. What is the company's new break-even point in units and in sales dollars? c. Repeat (b) above using the formula method.
product sells for P60 per unit and has a CM ratio of 40%. The company's fixed expenses are P360,000 per year. The company plans to sell 17,000 bookbags this year. Required: a. What are the variable expenses per unit? b. Using the equation method: 1. What is the break-even point in units and in sales dollars? 2. What sales level in units and in sales dollars is required to earn an annual profit of P90,000? 3. Assume that through negotiation with the manufacturer the Super Sales Company is able to reduce its variable expenses by P3 per unit. What is the company's new break-even point in units and in sales dollars? c. Repeat (b) above using the formula method.
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7EB: Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are...
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