Ms. Andrea Chadwick, the company president, has heard that there are multiple breakeven points for every product. She does not believe this and has asked you to provide the evidence of such a possibility. Some information about the company for 2011 is as follows: Selling price per unit Units produced Budgeted production Units sold Total fixed manufacturing overhead Total other fixed expenses Total variable manufacturing expenses Total other variable expenses P 40.00 30,000 units 30,000 units 25,000 units P 180,000 200,000 120,000 120,000 Requirements: 1. Determine the breakeven sales in units under both variable costing and absorption costing. 2. Determine the breakeven sales in units using absorption costing if the production units are actually 25,000?
Ms. Andrea Chadwick, the company president, has heard that there are multiple breakeven points for every product. She does not believe this and has asked you to provide the evidence of such a possibility. Some information about the company for 2011 is as follows: Selling price per unit Units produced Budgeted production Units sold Total fixed manufacturing overhead Total other fixed expenses Total variable manufacturing expenses Total other variable expenses P 40.00 30,000 units 30,000 units 25,000 units P 180,000 200,000 120,000 120,000 Requirements: 1. Determine the breakeven sales in units under both variable costing and absorption costing. 2. Determine the breakeven sales in units using absorption costing if the production units are actually 25,000?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Ms. Andrea Chadwick, the company president, has heard that there are multiple breakeven points for every product. She
does not believe this and has asked you to provide the evidence of such a possibility. Some information about the
company for 2011 is as follows:
Selling price per unit
Units produced
Budgeted production
Units sold
Total fixed manufacturing
overhead
Total other fixed expenses
Total variable manufacturing
expenses
Total other variable expenses
P
40.00
30,000
units
30,000
units
25,000
units
P
180,000
200,000
120,000
120,000
Requirements:
1. Determine the breakeven sales in units under both variable costing and absorption costing.
2. Determine the breakeven sales in units using absorption costing if the production units are actually 25,000?
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