NUBD Manufacturing is considering dropping a product line. It currently produces a multipurpose woodworking clamp in a simple manufacturing process that uses special equipment. Variable costs amount to P6.00 per unit. Fixed factory overhead costs, exclusive c depreciation, have been allocated to this product at a rate of P3.50 a unit and will continue whether or not production ceases. Depreciation on the special equipment amounts to P20,000 a year. If production of the clamp is stopped, the special equipment can be sold for P30,000; if production continues, however, the equipment will be useless for further production at the end of one year and will have no salvage value. The clamp has a unit sales price of P10. Ignoring income tax effects, the minimum number of units that would have to b sold in the current year to make it worthwhile to keep the equipment (on a cash-flow basis) is Do not use money sign. Sample format: 1,111

NUBD Manufacturing is considering dropping a product line. It currently produces a multipurpose woodworking clamp in a simple manufacturing process that uses special equipment. Variable costs amount to P6.00 per unit. Fixed factory overhead costs, exclusive c depreciation, have been allocated to this product at a rate of P3.50 a unit and will continue whether or not production ceases. Depreciation on the special equipment amounts to P20,000 a year. If production of the clamp is stopped, the special equipment can be sold for P30,000; if production continues, however, the equipment will be useless for further production at the end of one year and will have no salvage value. The clamp has a unit sales price of P10. Ignoring income tax effects, the minimum number of units that would have to b sold in the current year to make it worthwhile to keep the equipment (on a cash-flow basis) is Do not use money sign. Sample format: 1,111

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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