Alpha Frontier Inc. introduced a product ten years ago. The product's patent has now expired and Alpha expects a significant increase in suppliers for this product. Alpha originally sold the products at P1,500 each but competitors will likely sell it at P1,450. Last year, Alpha had actual and budgeted cost per unit of P806.67 and P783.33 respectively. If Alpha wants to maintain the profit per unit earned last year, how much should the decrease in the budgeted cost per unit be for the coming year? Last Year Budgeted -Actual P 1,175,000 P 1,210,000 1,500.00 Total Costs Units Sold 1,500.00 Cost per unit 783.33 P 806.67
Alpha Frontier Inc. introduced a product ten years ago. The product's patent has now expired and Alpha expects a significant increase in suppliers for this product. Alpha originally sold the products at P1,500 each but competitors will likely sell it at P1,450. Last year, Alpha had actual and budgeted cost per unit of P806.67 and P783.33 respectively. If Alpha wants to maintain the profit per unit earned last year, how much should the decrease in the budgeted cost per unit be for the coming year? Last Year Budgeted -Actual P 1,175,000 P 1,210,000 1,500.00 Total Costs Units Sold 1,500.00 Cost per unit 783.33 P 806.67
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Alpha Frontier Inc. introduced a product ten years ago. The
product's patent has now expired and Alpha expects a significant
increase in suppliers for this product. Alpha originally sold the products
at P1,500 each but competitors will likely sell it at P1,450. Last year,
Alpha had actual and budgeted cost per unit of P806.67 and P783.33
respectively. If Alpha wants to maintain the profit per unit earned last
year, how much should the decrease in the budgeted cost per unit be
for the coming year?
Last Year
Budgeted
-Actual
Total Costs
P 1,175,000 P 1,210,000
Units Sold
1,500.00
1,500.00
Cost per unit
783.33 P
806.67
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