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Q1. ABC Corp. sells a single product for P180 per unit. Last year, it sold 120,000 units and earned profit before tax of P300,000. Fixed costs amounted to 1,500,000. Next year, fixed cost is expected to increase by 60%. What should the selling price be next year to make the same amount of profit before tax P300,000? a. P180 b. P187.50 c. P5 d. P185

Q1. ABC Corp. sells a single product for P180 per unit. Last year, it sold 120,000 units and earned profit before tax of P300,000. Fixed costs amounted to 1,500,000. Next year, fixed cost is expected to increase by 60%. What should the selling price be next year to make the same amount of profit before tax P300,000? a. P180 b. P187.50 c. P5 d. P185

FINANCIAL ACCOUNTING
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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Q1. ABC Corp. sells a single product for P180 per unit. Last year, it sold 120,000 units and earned profit before tax of P300,000. Fixed costs amounted to 1,500,000. Next year, fixed cost is expected to increase by 60%. What should the selling price be next year to make the same amount of profit before tax P300,000? a. P180 b. P187.50 с. Р5 d. P185 Q2. Once a company has reduced inventories to zero, A. throughput costing income will be higher than variable costing income. B. absorption costing income will be higher than throughput costing income. C. absorption costing, variable costing, and throughput costing income will be equal. D. the company has reached its breakeven point.
Transcribed Image Text:Q1. ABC Corp. sells a single product for P180 per unit. Last year, it sold 120,000 units and earned profit before tax of P300,000. Fixed costs amounted to 1,500,000. Next year, fixed cost is expected to increase by 60%. What should the selling price be next year to make the same amount of profit before tax P300,000? a. P180 b. P187.50 с. Р5 d. P185 Q2. Once a company has reduced inventories to zero, A. throughput costing income will be higher than variable costing income. B. absorption costing income will be higher than throughput costing income. C. absorption costing, variable costing, and throughput costing income will be equal. D. the company has reached its breakeven point.
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