3. After reviewing its cost structure (variable costs of P7.50 per unit and monthly fixed costs of P60,000) and potential market, F Company established what it considered to be a reasonable selling price. The company expected to sell 50,000 units per month and planned its monthly results as follows: Sales P500,000 Variable costs 375,000 Contribution margin . 125,000 Fixed costs. 60,000 ......***.................. Income before taxes 65,000 Income tax (40%). 26,000 Net income . P 39,000 ======= Using the above information, compute the following: a. What selling price did the company establish.

3. After reviewing its cost structure (variable costs of P7.50 per unit and monthly fixed costs of P60,000) and potential market, F Company established what it considered to be a reasonable selling price. The company expected to sell 50,000 units per month and planned its monthly results as follows: Sales P500,000 Variable costs 375,000 Contribution margin . 125,000 Fixed costs. 60,000 ......***.................. Income before taxes 65,000 Income tax (40%). 26,000 Net income . P 39,000 ======= Using the above information, compute the following: a. What selling price did the company establish.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 3PB

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