SHOW YOUR SOLUTION IN GOOD ACCOUNTING FORM Copycat manufacturing company is subject to a 30% income tax rate, had the following operating data: Selling price per unit, P60; variable cost per unit, P22 and fixed costs of P504,000. Management plans to improve the quality of its product by replacing a component that costs P3.50 with a higher grade material that costs P5.50 and acquiring a P180,000 packing machine. The company will depreciate the machine over a 10 year life with no estimated salvage value using the straight line method of depreciation. If the company wants to earn an after tax income of P201,600, how many units must it sell under the new proposal?
SHOW YOUR SOLUTION IN GOOD ACCOUNTING FORM Copycat manufacturing company is subject to a 30% income tax rate, had the following operating data: Selling price per unit, P60; variable cost per unit, P22 and fixed costs of P504,000. Management plans to improve the quality of its product by replacing a component that costs P3.50 with a higher grade material that costs P5.50 and acquiring a P180,000 packing machine. The company will depreciate the machine over a 10 year life with no estimated salvage value using the straight line method of depreciation. If the company wants to earn an after tax income of P201,600, how many units must it sell under the new proposal?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 3PB
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SHOW YOUR SOLUTION IN GOOD ACCOUNTING FORM
Copycat manufacturing company is subject to a 30% income tax rate, had the following operating data: Selling price per unit, P60; variable cost per unit, P22 and fixed costs of P504,000. Management plans to improve the quality of its product by replacing a component that costs P3.50 with a higher grade
material that costs P5.50 and acquiring a P180,000 packing machine. The company will
a 10 year life with no estimated salvage value using the
tax income of P201,600, how many units must it sell under the new proposal?
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