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.
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- Suppose the marginal cost and marginal revenue (in ¢000) for a product produced by a company is estimated to be MC=q+35 MR=560+22q-q^2 Where q is the quantity produced and the firm’s break-even is 5 units per week You are Required to I. determine the total cost and the total revenue function in terms of q. II. estimate the output at which profit is maximize III. calculate the maximum profitMany times the selling price of a product p, is related to demand D, according to the relationship p=a - bD. However, a company has found that the price of their product can be related to demand (in units per year) according to the following equation: p=108.5 – 2.08D⁰.75. In addition, there is a fixed cost of P50,000 per year and the variable cost tomanufacture the product is P68 per unit. What is the level of demand which maximizes sales? What is the maximum sales? What level of demand maximizes profit? What is the maximum profit? What are the breakeven quantities of this product if p=678.39-1.08D?Company XYZ is currently making sales of $200,000. At this level, the variable expenses were $160,000. Assume that company XYZ expects sales to increase to $450,000 in the coming period with no change is expected to fixed expenses. How much is the expected change in profit? a. Cannot be determined O b. Increase by $160,000 O c. Increase by $10,000 d. Increase by $50,000 е. Increase by 40,000
- Company XYZ is currently making sales of $200,000. At this level, the variable expenses were $160,000. Assume that company XYZ expects sales to increase to $250,000 in the coming period with no change is expected to fixed ?expenses. How much is the expected change in profit Increase by $50,000 .a O Increase by $160,000 .b O Increase by $10,000 .c O Cannot be determined d O Increase by 40,000 .e O5. The contribution margin ratio measures the effect on the total contribution margin of a given change in total sales. True False 6. A company with sales of RM100,000, variable expenses of RM70,000, and fixed expenses of RM50,000 will reach its break-even point if sales are increased by RM20,000. True False 7. At the break-even point, variable expenses and fixed expenses are equal. True False 8. All other things the same, a decrease in variable expense per unit will reduce the break-even point. True False 9. An increase in the number of units sold will decrease the break-even point. True False 10. All other things equal, the margin of safety in a company with high fixed costs and low variable costs will tend to be higher than the margin of safety in a similar company that has low fixed costs and high variable costs. True FalseQuestion 3: Oman Company's financial information is given in the table below. Year Sales (OMR) Fixed Costs 445000 Variable Costs : 2020 105000 245000 2021 500000 150000 280000 You are required to calculate the following values for each year. The years are independent of each other. a) P/V ratio, b) В.Е.P. c) Sales required to earn a profit of OMR 45000. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 300000.
- I Question 3: Sohar Company's financial information is given in the table below. Sales (OMR) Fixed Costs 405000 450000 Year Variable Costs 2019 225000 2020 120000 240000 Calculate: a) PV ratio, b) B.E.P. c) Sales required to earn a profit of OMR 40000. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 200000.Q2. Suppose that Nafitol Company has a fixed cost of ETB 35,000 and VC of ETB 1.75 per unit for its products. Let us further consider that selling price is birr 2.7 per unit. Required: A. Write the revenue and the cost equation of the company B. At what level of production output is the company Break-even? C. What is the amount of the revenue when the company produces 300,000 units? D. If the company plans to earn a profit of 7000, what amount of quantity has to be produced?If a company’s variable costs are 70% of sales, which formula represents the computation of peso sales that will yield a profit equal to 10% of the amount of sales when P equals sales in pesos for the period and FC equals total fixed costs for the period? a. P = .2/FC b. P = FC/.2 c. P = .27/FC d. P = FC/.27
- Company XYZ is currently making sales of $ 200,000, At this level, the variable expenses were $ 160,000. Assume that company XYZ expects sales to increase to $ 450,000 in the coming period with no change is expected to foed expenses How much is the expected change in profit?What is the company's CM ratio if the companies can sell more units thereby increase sales by $55,000 per month? And there is no change in fixed expense. By how many would you expect monthly net operating income to increase by? Per unit Total Volume Sales $40.00 608000 Variable cost 28 425600 Contribution margin 12 182400 Fixed expense 156000 Net operating 12 26400A projected income statement of Hailwork’s company for the coming year follows: Sales $506300 |Total Variable Cost 170865 Contribution Margin ? Total Fixed Cost 175000 Operating Income ? Compute contribution margin and contribution margin ratio Compute the Operating Income How much revenue must be earned in order to breakeven What is the effect on contribution margin ratio if the unit selling price and unit variable cost increase by 10 percent each?