Answered: 12 Marites Company, which is subject…

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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Marites Company, which is subject to 30% tax, had the following operating data for the period just ended
Selling price per unit P 80
Variable cost per unit 42
Fixed costs 504,000
Management plans to improve the quality of its only product by way of implementing the following:
(1) Replacing a component that costs P1.50 with a higher-grade unit that costs P3.50 and
(2) Acquiring a P90,000 packaging machine. Maris will depreciate the machine over a 5-year period with no
estimated salvage value by the straight-line method of depreciation.
If the company wants to earn after-tax of P201,600 in the coming year, how many units must be sold?
a. 10,300 units
b. 21,316 units
c. 22,500 units
d. 27,000 units

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