The owners of Tiki Tiki Land have been looking for ways to improve sales at the store. One of the proposals is to have a weekly raffle with a total prize of P10,000 per week. For every P50 worth of goods purchased, the customer shall receive a numbered ticket for the raffle. The variable cost to print and distribute the tickets has been estimated at five pesos (P5.00). promotions and other fixed costs in connection with the raffle, likewise, have been estimated at P15,000 per week. The current weekly operating results of Tiki Tiki Land are given below: Sales P1,000,000 Variable costs 700,000 Fixed cost for the week 120,000 Assuming the raffle can increase sales by 30% per week, profit will Increase by how much?

The owners of Tiki Tiki Land have been looking for ways to improve sales at the store. One of the proposals is to have a weekly raffle with a total prize of P10,000 per week. For every P50 worth of goods purchased, the customer shall receive a numbered ticket for the raffle. The variable cost to print and distribute the tickets has been estimated at five pesos (P5.00). promotions and other fixed costs in connection with the raffle, likewise, have been estimated at P15,000 per week. The current weekly operating results of Tiki Tiki Land are given below: Sales P1,000,000 Variable costs 700,000 Fixed cost for the week 120,000 Assuming the raffle can increase sales by 30% per week, profit will Increase by how much?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11E

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