Should America Co. make the change? Yes, the company will be better off by P6,000. No, because sales will drop by 3,000 units. No, because the company will be worse off by P4,000. No, because the company will be worse off by P22,000. It is impossible to judge because additional information is needed

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Should America Co. make the change?

  • Yes, the company will be better off by P6,000.
  • No, because sales will drop by 3,000 units.
  • No, because the company will be worse off by P4,000.
  • No, because the company will be worse off by P22,000.
  • It is impossible to judge because additional information is needed
America Co. is studying the profitability of a change in operation and has gathered the following
information:
Current
Operation
P38,000
P16
Anticipated
Operation
P48,000
Fixed costs
Selling price
Variable cost
Sales (units)
P22
P10
9,000
P12
6,000
Transcribed Image Text:America Co. is studying the profitability of a change in operation and has gathered the following information: Current Operation P38,000 P16 Anticipated Operation P48,000 Fixed costs Selling price Variable cost Sales (units) P22 P10 9,000 P12 6,000
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