of P184,000 and a total cost and expenses amounting to P211,600. Fixed costs amounted to P86,480, P49,680 of which are unavoidable regardless of whether the product will be dropped or not. a. What is the product eliminatio
of P184,000 and a total cost and expenses amounting to P211,600. Fixed costs amounted to P86,480, P49,680 of which are unavoidable regardless of whether the product will be dropped or not. a. What is the product eliminatio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The income statement of product Hammer, one of the several product being sold Tony Company
shows a sales revenue of P184,000 and a total cost and expenses amounting to P211,600. Fixed
costs amounted to P86,480, P49,680 of which are unavoidable regardless of whether the product will
be dropped or not.
a. What is the product elimination point (shutdown) point (round to nearest hundred thousand)?
b. If in the next year, it is estimated that the revenue from Product Hammer would only be P100,000,
should the company continue or drop the product line?
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