Product A has a selling price of P50 per unit and variable expenses of P30 per unit. If the company is past its break-even point and sales increase by P200,000, one would expect net income to increase by а. Р40,000 b. P80,000 с. Р120,000 d. None of these.
Product A has a selling price of P50 per unit and variable expenses of P30 per unit. If the company is past its break-even point and sales increase by P200,000, one would expect net income to increase by а. Р40,000 b. P80,000 с. Р120,000 d. None of these.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:9. Product A has a selling price of P50 per unit and variable expenses of P30
per unit. If the company is past its break-even point and sales increase by
P200,000, one would expect net income to increase by
a. P40,000
b. P80,000
c. P120,000
d. None of these.
10. 11 sales increase from P400.000 to P450.000, and if the degree of operating
leverage is 6 (contribution margin divided by net income), one would expeet
net income to increase by
a. 75%
b. 67%
c. 12.5%
d. None of these.
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