12. During 2020, Thor Lab supplied hospitals with a comprehensive diagnostic kit for P1,200. At a volume of 8,000 kits, Thor had fixed costs of P1,000,000 and a profit before income taxes of P200,000. Due to an adverse legal decision, Thor's 2021 liability insurance increased by P1,200,000 over 2020. Assuming the volume and other costs are unchanged, what should the 2021 price be if Thor is to make the same P200,000 profit before income taxes? c. P1,500 d. P2,400 a. P1,200 e. None of these; b. P1,350 answer is

12. During 2020, Thor Lab supplied hospitals with a comprehensive diagnostic kit for P1,200. At a volume of 8,000 kits, Thor had fixed costs of P1,000,000 and a profit before income taxes of P200,000. Due to an adverse legal decision, Thor's 2021 liability insurance increased by P1,200,000 over 2020. Assuming the volume and other costs are unchanged, what should the 2021 price be if Thor is to make the same P200,000 profit before income taxes? c. P1,500 d. P2,400 a. P1,200 e. None of these; b. P1,350 answer is

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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USEK Medical School manufactures the COVID19 Vaccines that are sold through contracted distributors. Those distributors are paid a commission of 18% of revenues. USEK Medical School is considering replacing the contracted distributors with its own group of students, who would be paid a commission of 12% of revenues and total salaries of $7,950,000. The income statement for the year ending December 31, 2020, under the two scenarios is shown here. USEK Medical School Income Statement For the Year Ended December 31, 2020 Using contracted Distributors Using Own Group of students Revenues $45,000,000 $45,000,000 Cost of Goods Sold Variable $15,750,000 $15,750,000 $5,425,000 Fixed $5,425,000 $21,175,000 $21,175,000 Gross Margin Marketing Costs $23,825,000 $23,825,000 Commissions $8,100,000 $5,400,000 Fixed Costs Operating Income $5,250,000 $13,350,000 S7,950,000 $13,350,000 $10,475,000 $10,475,000 Required: 1. Calculate USEK Medical School's 2020 contribution margin percentage, breakeven…
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