1. A beverage stand can sell either soft drinks or coffee on a given day. If the stand sells soft drinks and the weather is hot, it will make P2,500; if the weather is cold, the profit will be P1,000. If the stand sells coffee and the weather is hot, it will make P1,900; if the weather is cold, the profit will be P2,000. The probability of cold weather on a given day at this time is 60%. The expected payoff for selling coffee is? (Show solution and formula) a. P1,960 b. P3,900 c. P1,360 d. P2,200 2. When Blossom Corporation's sales increased by 10%, its profit increased from P250,000 to P350,000. What is Blossom's degree of operating leverage? 3. Sunshine Company mines three products. Gold Ore sells for P1,000,000 per ton, variable costs are P600,000 per ton, and fixed mining costs are P6,000,000. The segment margin for 2019 was P1,200,000. The management of Sunshine Company was considering dropping the mining of Gold Ore. Only one-half of the fixed expenses are direct and would be eliminated if the segment was dropped. If Gold Ore were dropped, net income for Sunshine Company would: a. decrease by P1,200,000 b. increase by P2,000,000 c. decrease by P2,000,000 d. increase by P1,200,000
1. A beverage stand can sell either soft drinks or coffee on a given day. If the stand sells soft drinks and the weather is hot, it will make P2,500; if the weather is cold, the profit will be P1,000. If the stand sells coffee and the weather is hot, it will make P1,900; if the weather is cold, the profit will be P2,000. The probability of cold weather on a given day at this time is 60%. The expected payoff for selling coffee is? (Show solution and formula)
a. P1,960
b. P3,900
c. P1,360
d. P2,200
Sunshine Company mines three products. Gold Ore sells for P1,000,000 per ton, variable costs are P600,000 per ton, and fixed mining costs are P6,000,000. The segment margin for 2019 was P1,200,000. The management of Sunshine Company was considering dropping the mining of Gold Ore. Only one-half of the fixed expenses are direct and would be eliminated if the segment was dropped. If Gold Ore were dropped, net income for Sunshine Company would:
a. decrease by P1,200,000
b. increase by P2,000,000
c. decrease by P2,000,000
d. increase by P1,200,000
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