Belowis an income statement for NUBD Company P400,000 (120.000) Contribution margin P280,000 (200.000) P 80,000 (20.000) P 60.000 Sales Variable costs Fixed costs Profit before taxes Income tax Net income

Belowis an income statement for NUBD Company P400,000 (120.000) Contribution margin P280,000 (200.000) P 80,000 (20.000) P 60.000 Sales Variable costs Fixed costs Profit before taxes Income tax Net income

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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Question

Assuming that the fixed costs are expected to remain at P200,000 for the coming year and the sales price per unit and variable costs per unit are also expected to remain constant, how much profit after taxes will be produced if the company anticipates sales for the coming year rising to 125 percent of the current year’s level?

Belowis an income statement for NUBD Company:
Sales
Variable costs
P400,000
(120,000)
Contribution margin P280,000
(200.000)
Profit before taxes P 80,000
(20.000)
P 60.000
Fixed costs
Income tax
Net income

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