PROBLEM 7. Mcoy Company has, for the coming year, budgeted sales of P3,200,000 with contribution margin of 60 percent and fixed costs of P1,200,000. The company's only one product line sells for P80. The company is subject to 40 percent tax bracket. 4. The operations manager believes that the variable cost will increase to P34 per unit. The sales manager believes the selling price can be increased. What is the new selling price that will give the same contribution margin ratio of 60%? 5. Assume that the amount of total fixed cost increases by 15%. What is the effect of this increase on each of the following? a. Break-even sales volume b. Before-tax profit Contribution margin d. Required sales to earn same amount of profit C.

PROBLEM 7. Mcoy Company has, for the coming year, budgeted sales of P3,200,000 with contribution margin of 60 percent and fixed costs of P1,200,000. The company's only one product line sells for P80. The company is subject to 40 percent tax bracket. 4. The operations manager believes that the variable cost will increase to P34 per unit. The sales manager believes the selling price can be increased. What is the new selling price that will give the same contribution margin ratio of 60%? 5. Assume that the amount of total fixed cost increases by 15%. What is the effect of this increase on each of the following? a. Break-even sales volume b. Before-tax profit Contribution margin d. Required sales to earn same amount of profit C.

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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Dd.6.