- 4.12 Octagon Company is considering introducing a new video camera. Its selling price s projected to be P1,000 per unit. Variable manufacturing costs are estimated to be P450 per unit The company expects the annual fixed manufacturing costs for the new camera to be P3,500,000 per year if its annual sales do not exceed the current regular shift capacity of 12,000 cameras and. P6,000,000 otherwise. Sales commissions are paid at 5% of sales. The company also plans to spend P1,000,000 per year on advertising. 000.08 aleo) enirbsm lsurmLA Instructions: 000,81 1. Determine the contribution margin per unit. 2. Determine the two break even points in terms of number of cameras sold per month. 3. Suppose a market research survey indicates that a 10% reduction in the selling price wil lead to a 20% increase in sales. Should the company reduce the price by 10%? Fobcoru coar ber po

- 4.12 Octagon Company is considering introducing a new video camera. Its selling price s projected to be P1,000 per unit. Variable manufacturing costs are estimated to be P450 per unit The company expects the annual fixed manufacturing costs for the new camera to be P3,500,000 per year if its annual sales do not exceed the current regular shift capacity of 12,000 cameras and. P6,000,000 otherwise. Sales commissions are paid at 5% of sales. The company also plans to spend P1,000,000 per year on advertising. 000.08 aleo) enirbsm lsurmLA Instructions: 000,81 1. Determine the contribution margin per unit. 2. Determine the two break even points in terms of number of cameras sold per month. 3. Suppose a market research survey indicates that a 10% reduction in the selling price wil lead to a 20% increase in sales. Should the company reduce the price by 10%? Fobcoru coar ber po

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

4.12 ugnso eniraer
ah ho Octagon Company is considering introducing a new video camera. Its selling price is
projected to be P1,000 per unit. Variable manufacturing costs are estimated to be P450 per unit
The company expects the annual fixed manufacturing costs for the new camera to be P3,500.00
per year if its annual sales do not exceed the current regular shift capacity of 12,000 cameras and
P6,000,000 otherwise. Sales commissions are paid at 5% of sales. The company also plans to
spend P1,000,000 per year on advertising.
exod 000,08
aleo
Instructions:
000,81
1. Determine the contribution margin per unit.
2. Determine the two break even points in terms of number of cameras sold month.
3. Suppose a market research survey indicates that a 10% reduction in the selling price wil
lead to a 20% increase in sales. Should the company reduce the price by 10%?
per
Fobcoru coer bet pox

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