16. Smirnoff Corp. invested P31,250,000 in a cabinet-making business. It expects to earn a 25% return on its investment in equipment used in the manufacturing the cabinets. Its consultants estimate that 10,000 units of cabinets next year. Estimated costs per unit of cabinet at this level follows: Variable manufacturing costs = P1,562.50; Fixed selling and administrative costs = P625.0O; Fixed manufacturing costs = P312.50. To accomplish the company objective, one cabinet should be priced at:
16. Smirnoff Corp. invested P31,250,000 in a cabinet-making business. It expects to earn a 25% return on its investment in equipment used in the manufacturing the cabinets. Its consultants estimate that 10,000 units of cabinets next year. Estimated costs per unit of cabinet at this level follows: Variable manufacturing costs = P1,562.50; Fixed selling and administrative costs = P625.0O; Fixed manufacturing costs = P312.50. To accomplish the company objective, one cabinet should be priced at:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![16. Smirnoff Corp. invested P31,250,000 in a
cabinet-making business. It expects to earn
a 25% return on its investment in equipment
used in the manufacturing the cabinets. Its
consultants estimate that 10,000 units of
cabinets next year. Estimated costs per unit
of cabinet at this level follows: Variable
manufacturing costs = P1,562.50; Fixed
selling and administrative costs = P625.00;
%3D
Fixed manufacturing costs = P312.50. To
accomplish the company objective, one
cabinet should be priced at:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe18d3027-51c4-4d3f-9353-31d8b5256097%2F160ca445-fe5b-4d75-b060-369aefe267ad%2F9im38z_processed.jpeg&w=3840&q=75)
Transcribed Image Text:16. Smirnoff Corp. invested P31,250,000 in a
cabinet-making business. It expects to earn
a 25% return on its investment in equipment
used in the manufacturing the cabinets. Its
consultants estimate that 10,000 units of
cabinets next year. Estimated costs per unit
of cabinet at this level follows: Variable
manufacturing costs = P1,562.50; Fixed
selling and administrative costs = P625.00;
%3D
Fixed manufacturing costs = P312.50. To
accomplish the company objective, one
cabinet should be priced at:
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