#21 ANSWER ALL THE QUESTIONS AND SHOW YOUR SOLUTION 1. Multi-plant operations. Frances Meleina Company operates a plant in Toril City with amaximum capacity of 20,000 units of product having a sales price of P40 each. The mar-ket is expected to have a maximum capacity of 50,000 units. Frances is contemplatingof leasing a plant to increase its capacity. The following data relate to the existing plantand the plant that may be leased:Own PlantPlant-for-LeaseVariable production cost per unitFixed costsP24P20P400,000P50,000Required:1. What is the company's breakeven point in units?2. How many units should the company sell to have a profit of P300,000?3. How many units should the company sell to have a profit of 20% of the total fixedcosts and the sales manager receives a P2 bonus for each unit sold beyond thebreakeven point?The sales in units to have a profit of P350,000, a tax rate of 30% while the lessordemands a 2% share on gross receipts beyond the breakeven point and reducingrental expense by 5%.4.

Breakeven point is a zone where there is neither any profit generated nor any loss suffered. This…

. Multi-plant operations. Frances Meleina Company operates a plant in Toril City with a maximum capacity of 20,000 units of product having a sales price of P40 each. The mar- ket is expected to have a maximum capacity of 50,000 units. Frances is contemplating of leasing a plant to increase its capacity. The following data relate to the existing plant and the plant that may be leased: Own Plant Plant-for-Lease Variable production cost per unit Fixed costs P 24 P400,000 P 20 P50,000 Required: 1. What is the company's breakeven point in units? 2. How many units should the company sell to have a profit of P300,000? 3. How many units should the company sell to have a profit of 20% of the total fixed costs and the sales manager receives a P2 bonus for each unit sold beyond the breakeven point? 4. The sales in units to have a profit of P350,000, a tax rate of 30% while the lessor demands a 2% share on gross receipts beyond the breakeven point and reducing rental expense by 5%.

. Multi-plant operations. Frances Meleina Company operates a plant in Toril City with a maximum capacity of 20,000 units of product having a sales price of P40 each. The mar- ket is expected to have a maximum capacity of 50,000 units. Frances is contemplating of leasing a plant to increase its capacity. The following data relate to the existing plant and the plant that may be leased: Own Plant Plant-for-Lease Variable production cost per unit Fixed costs P 24 P400,000 P 20 P50,000 Required: 1. What is the company's breakeven point in units? 2. How many units should the company sell to have a profit of P300,000? 3. How many units should the company sell to have a profit of 20% of the total fixed costs and the sales manager receives a P2 bonus for each unit sold beyond the breakeven point? 4. The sales in units to have a profit of P350,000, a tax rate of 30% while the lessor demands a 2% share on gross receipts beyond the breakeven point and reducing rental expense by 5%.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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