Problem 5 The BODY Company sold 50,000 units of its product at P24 per unit. Variable costs are P13.20 per unit (manufacturing costs of P10 and selling costs of P3.20). Fixed costs are incurred uniformly throughout the year and amount to P594, 000 (manufacturing costs of P400, 000 and selling costs of P194, 000). There are no beginning and ending inventories. REQUIRED: 1. Compute the break-even point in units and sales pesos. 2. Compute the number of units that must be sold to realize a net income of P75, 060 before taxes. 3. If the income tax rate is 32%, compute the number of units that must be sold to realize a net income of P72, 000 after taxes. 4. If labor costs were 50% of variable costs and 20% of fixed costs, a 10% increase in wages and salaries would increase the number of units necessary to break-even. Compute the break-even units. 5. What was Beep's net income or loss?
Problem 5 The BODY Company sold 50,000 units of its product at P24 per unit. Variable costs are P13.20 per unit (manufacturing costs of P10 and selling costs of P3.20). Fixed costs are incurred uniformly throughout the year and amount to P594, 000 (manufacturing costs of P400, 000 and selling costs of P194, 000). There are no beginning and ending inventories. REQUIRED: 1. Compute the break-even point in units and sales pesos. 2. Compute the number of units that must be sold to realize a net income of P75, 060 before taxes. 3. If the income tax rate is 32%, compute the number of units that must be sold to realize a net income of P72, 000 after taxes. 4. If labor costs were 50% of variable costs and 20% of fixed costs, a 10% increase in wages and salaries would increase the number of units necessary to break-even. Compute the break-even units. 5. What was Beep's net income or loss?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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compute the following questions (1 to 5) Don't forget to show your complete solution
Transcribed Image Text:Problem 5
The BODY Company sold 50,000 units of its
product at P24 per unit. Variable costs are P13.20 per
unit (manufacturing costs of P10 and selling costs of
P3.20). Fixed costs are incurred uniformly throughout
the year and amount to P594, 000 (manufacturing costs
of P400, 000 and selling costs of P194, 000). There are
no beginning and ending inventories.
REQUIRED:
1. Compute the break-even point in units and sales
pesos.
2. Compute the number of units that must be sold to
realize a net income of P75, 060 before taxes.
3. If the income tax rate is 32%, compute the number
of units that must be sold to realize a net income of
P72, 000 after taxes.
4. If labor costs were 50% of variable costs and 20%
of fixed costs, a 10% increase in wages and
salaries would increase the number of units
necessary to break-even. Compute the break-even
units.
5. What was Beep's net income or loss?
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