tay-Buhay Corporation produces push-button switches used in the manufactureof electric fans. For the year 200B, the sales of electric fans have been forecasted at800,000 units. Each unit of electric fans requires 4 pieces of push-button switches.Patay-Buhay regularly supplies 60% of the push-button switches used in theproduction of new electric fans.In addition, a replacement parts market also exists. Over the past 5 years, the sales of thereplacement push-button switches have increased per year by 20% of the preceding year’s sales.In 200A, Patay-Buhay sold 150,000 pieces of push-button replacement switches. The trend isexpected to continue in 200B.The company sells the
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Patay-Buhay Corporation produces push-button switches used in the manufacture
of electric fans. For the year 200B, the sales of electric fans have been
800,000 units. Each unit of electric fans requires 4 pieces of push-button switches.
Patay-Buhay regularly supplies 60% of the push-button switches used in the
production of new electric fans.
In addition, a replacement parts market also exists. Over the past 5 years, the sales of the
replacement push-button switches have increased per year by 20% of the preceding year’s sales.
In 200A, Patay-Buhay sold 150,000 pieces of push-button replacement switches. The trend is
expected to continue in 200B.
The company sells the push-button switches for P10 per piece in both markets.
The budgeted sales revenue based on the expected number of pieces of push-button switches to
be sold in 200B is
a. P19,200,000.
b. P20,700,000
c. 21,000,000
d. P2,100,000
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