Drape Corp. would like to market a new product at a selling price of P15 per unit. Fixed costs for this product are P1,000,000 for less than 500,000 units of outputand P1,500,000 for 500,000 or more units of output. The contribution margin percentage is 35%. How many units of this product must be sold to earn a targetoperating income of P1 million?

Contribution margin per unit = P15 x 35% = P5.25

Drape Corp. would like to market a new product at a selling price of P15 per unit. Fixed costs for this product are P1,000,000 for less than 500,000 units of outpu and P1,500,000 for 500,000 or more units of output. The contribution margin percentage is 35%. How many units of this product must be sold to earn a target operating income of P1 million?

Drape Corp. would like to market a new product at a selling price of P15 per unit. Fixed costs for this product are P1,000,000 for less than 500,000 units of outpu and P1,500,000 for 500,000 or more units of output. The contribution margin percentage is 35%. How many units of this product must be sold to earn a target operating income of P1 million?

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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