Copycat manufacturing company is subject to 30% income tax rate has the following operating data: Selling price per unit, P60; variable cost per unit, P22 and fixed cost of P504,000. Management plans to improve the quality of its product by replacing a component that costs P3.50, with a higher grade material that costs P5.50 and acquiring a P180,000 packing machine over a 10 year life with no estimated salvage value using the straight line method of depreciation. If the company wants to earn an after tax income of P201,600, how many units must it sell under the new proposal?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Copycat manufacturing company is subject to 30% income tax rate has the following operating data: Selling price per unit, P60; variable cost per unit, P22 and fixed cost of P504,000. Management plans to improve the quality of its product by replacing a component that costs P3.50, with a higher grade material that costs P5.50 and acquiring a P180,000 packing machine over a 10 year life with no estimated salvage value using the straight line method of
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