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 P 1,500 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? Budgeted Last Year Actual Total Costs P 1,175,000 P 1,210,000 Units Sold 1,500.00 1,500.00 Cost per unit P 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 P 1,500 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? Budgeted Last Year Actual Total Costs P 1,175,000 P 1,210,000 Units Sold 1,500.00 1,500.00 Cost per unit P 783.33 P 806.67
Related questions
Question
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 P 1,500 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?
|
|
Budgeted |
Last Year Actual |
|
Total Costs |
P 1,175,000 |
P 1,210,000 |
|
Units Sold |
1,500.00 |
1,500.00 |
|
Cost per unit |
P 783.33 |
P 806.67 |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.