A firm has the capacity to produce 1,000,000 units of a product per year. At present, it is able to produce and sell 600,000 units yearly at a total income of P720,000.00. Annual fixed costs are P250,000 and the variable costs per unit is P0.70. a. Give the firm's annual profit or loss for this production. b. Give the number of units that should be sold annually to break even

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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2. A firm has the capacity to produce 1,000,000 units of a product per year. At present, it is able to produce
and sell 600,000 units yearly at a total income of P720,000.00. Annual fixed costs are P250,000 and the
variable costs per unit is P0.70.
a. Give the firm's annual profit or loss for this production.
b. Give the number of units that should be sold annually to break even
Transcribed Image Text:2. A firm has the capacity to produce 1,000,000 units of a product per year. At present, it is able to produce and sell 600,000 units yearly at a total income of P720,000.00. Annual fixed costs are P250,000 and the variable costs per unit is P0.70. a. Give the firm's annual profit or loss for this production. b. Give the number of units that should be sold annually to break even
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