1. Increase the sales volume by 25% New Sales New BES in New BES in New New Operating Volume units Pesos DOL Profit 2. Increase the fixed costs by 10% New BES in units New BES in Pesos New DOL New Operating Profit 3. Increase the unit variable costs to P14 New DOL New Operating Profit New BES in units New BES in Pesos

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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100%
Benovan Co. reports the following data:
Sales (@ unit selling price of P20)
Less Variable Costs
Contribution Margin
Less Fixed Costs
Operating Profit
P 840,000
546.000
P 294,000
168.000
P 126,000
Rased on the above data, the following were determined by an accounting staff:
========
Sales
Breakeven
Sales in
Breakeven
Sales in units
Volume
UVC
VC%
UCM
CM%
DOL
pesos
The manager consulted you regarding the effects of the following changes on the
company's breakeven sales in units, breakeven sales in pesos, Degree of Operating
Leverage (DOL) and Operating Profit. Assuming all other factors remain the same, the
following independent proposals were made:
1. Increase the sales volume by 25%
New Sales
Volume
New BES in
units
New BES in
Pesos
New Operating
Profit
New
DOL
2. Increase the fixed costs by 10%
New DOL
New Operating Profit
New BES in Pesos
New BES in units
3. Increase the unit variable costs to P14
New Operating Profit
New DOL
New BES in Pesos
New BES in units
Based on the three independent proposals given above, summarize your findings.
Transcribed Image Text:Benovan Co. reports the following data: Sales (@ unit selling price of P20) Less Variable Costs Contribution Margin Less Fixed Costs Operating Profit P 840,000 546.000 P 294,000 168.000 P 126,000 Rased on the above data, the following were determined by an accounting staff: ======== Sales Breakeven Sales in Breakeven Sales in units Volume UVC VC% UCM CM% DOL pesos The manager consulted you regarding the effects of the following changes on the company's breakeven sales in units, breakeven sales in pesos, Degree of Operating Leverage (DOL) and Operating Profit. Assuming all other factors remain the same, the following independent proposals were made: 1. Increase the sales volume by 25% New Sales Volume New BES in units New BES in Pesos New Operating Profit New DOL 2. Increase the fixed costs by 10% New DOL New Operating Profit New BES in Pesos New BES in units 3. Increase the unit variable costs to P14 New Operating Profit New DOL New BES in Pesos New BES in units Based on the three independent proposals given above, summarize your findings.
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