2. A company is currently operating at a sales level (D) of only 1,250 units per year, with a selling price in pesos (p) given by p = 4200 - 2.50 per unit. The fixed cost of the company is P450,000 per year and the variable cost is P325 per unit. Is the company gaining or losing? It is being planned that the company will engage in a modernization plan that would increase the fixed cost by P85,000 per year, will lower the number of units sold per year by 10 units but would reduce the variable costs by P65 per unit. Would you agree with the plan?
2. A company is currently operating at a sales level (D) of only 1,250 units per year, with a selling price in pesos (p) given by p = 4200 - 2.50 per unit. The fixed cost of the company is P450,000 per year and the variable cost is P325 per unit. Is the company gaining or losing? It is being planned that the company will engage in a modernization plan that would increase the fixed cost by P85,000 per year, will lower the number of units sold per year by 10 units but would reduce the variable costs by P65 per unit. Would you agree with the plan?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![2. A company is currently operating at a sales level (D) of only 1,250
units per year, with a selling price in pesos (p) given by p = 4200
- 2.50 per unit. The fixed cost of the company is P450,000 per
year and the variable cost is P325 per unit. Is the company
gaining or losing?
It is being planned that the company will engage in a
modernization plan that would increase the fixed cost by P85,000 per
year, will lower the number of units sold per year by 10 units but
would reduce the variable costs by P65 per unit. Would you agree
with the plan?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbedcc248-ac4c-4c63-9536-69deafe562fe%2F46fefd67-08ed-4332-8b11-d98d8111c663%2F3glc20f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2. A company is currently operating at a sales level (D) of only 1,250
units per year, with a selling price in pesos (p) given by p = 4200
- 2.50 per unit. The fixed cost of the company is P450,000 per
year and the variable cost is P325 per unit. Is the company
gaining or losing?
It is being planned that the company will engage in a
modernization plan that would increase the fixed cost by P85,000 per
year, will lower the number of units sold per year by 10 units but
would reduce the variable costs by P65 per unit. Would you agree
with the plan?
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