Kindly, answer the following:a. The sales manager feels that an P110,000 increase in monthly advertising budget, combined with an intensified effort by the sales staff will result in a P840,000 increase in monthly sales. Considering these changes, what will be the company’s increase or decrease in profit?b. The president is convinced that a 10% reduction in the selling price, combined with an increase of P35,000 in the monthly advertising budget, will cause units sales to double. Considering these changes, how much is the company’s expected profit?c. A new package for the product is being considered to induce sales. This package costs P0.60 per unit. Considering the new package cost, how many units would have to be sold each month to earn a profit ofP90,000? Problem 7. Kate Company produces a single product and presented below are data taken from its recent incomestatement.Sales (135,000 units at P20)Less: Variable costsP2,700,0001,890,000810,000Contribution MarginLess: Fixed costs900,000LossP (90,000)Required:a. The sales manager feels that an P110,000 increase in monthly advertising budget, combined with anintensified effort by the sales staff will result in a P840,000 increase in monthly sales. Considering thesechanges, what will be the company's increase or decrease in profit?b. The president is convinced that a 10% reduction in the selling price, combined with an increase ofP35,000 in the monthly advertising budget, will cause units sales to double. Considering these changes,how much is the company's expected profit?c. A new package for the product is being considered to induce sales. This package costs P0.60 per unit.Considering the new package cost, how many units would have to be sold each month to earn a profit ofP90,000?

Break even sales refers to the sales revenue in which one can cover its fixed costs and variable…

Answered: Kindly, answer the following: a. The…

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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Kindly, answer the following:

a. The sales manager feels that an P110,000 increase in monthly advertising budget, combined with an intensified effort by the sales staff will result in a P840,000 increase in monthly sales. Considering these changes, what will be the company’s increase or decrease in profit?

b. The president is convinced that a 10% reduction in the selling price, combined with an increase of P35,000 in the monthly advertising budget, will cause units sales to double. Considering these changes, how much is the company’s expected profit?

c. A new package for the product is being considered to induce sales. This package costs P0.60 per unit. Considering the new package cost, how many units would have to be sold each month to earn a profit ofP90,000?

Problem 7. Kate Company produces a single product and presented below are data taken from its recent income
statement.
Sales (135,000 units at P20)
Less: Variable costs
P2,700,000
1,890,000
810,000
Contribution Margin
Less: Fixed costs
900,000
Loss
P (90,000)
Required:
a. The sales manager feels that an P110,000 increase in monthly advertising budget, combined with an
intensified effort by the sales staff will result in a P840,000 increase in monthly sales. Considering these
changes, what will be the company's increase or decrease in profit?
b. The president is convinced that a 10% reduction in the selling price, combined with an increase of
P35,000 in the monthly advertising budget, will cause units sales to double. Considering these changes,
how much is the company's expected profit?
c. A new package for the product is being considered to induce sales. This package costs P0.60 per unit.
Considering the new package cost, how many units would have to be sold each month to earn a profit of
P90,000?

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