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5. Acme C

5. Acme C

FINANCIAL ACCOUNTING
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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5. Acme Corp. makes a vending machines for small companies. They have recently started selling their vending machines in NCR with a great deal of success, at a price of P5,000 per machine. The company is convinced that they will need to either build a new plant near in Quezon city or expand their existing plant in Manila City. If they build a new plant in Quezon city, the annual fixed costs will be P6,000,000 and the variable cost will be P3,000 for every vending machine delivered to NCR. If they expand the Manila City plant, their annual fixed costs for the expansion will be P2,000,000 and the variable costs will be P4,000 for each vending machine delivered throughput the national capital Region. a. Determine the break-even-point quantity for the 2 proposed locations b. plot in a graph the break-even-point c. Recommend the best Location
Transcribed Image Text:5. Acme Corp. makes a vending machines for small companies. They have recently started selling their vending machines in NCR with a great deal of success, at a price of P5,000 per machine. The company is convinced that they will need to either build a new plant near in Quezon city or expand their existing plant in Manila City. If they build a new plant in Quezon city, the annual fixed costs will be P6,000,000 and the variable cost will be P3,000 for every vending machine delivered to NCR. If they expand the Manila City plant, their annual fixed costs for the expansion will be P2,000,000 and the variable costs will be P4,000 for each vending machine delivered throughput the national capital Region. a. Determine the break-even-point quantity for the 2 proposed locations b. plot in a graph the break-even-point c. Recommend the best Location
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