SMC company manufactures a number of electric products. Rechargeable Battery is one of the SMC’s products that sells for Php180/unit. Total fixed expenses related to rechargeable Battery are Php270,000 per month and variable expenses involved in manufacturing this product are Php 126 per unit. Monthly sales are 8,000 Rechargeable Battery. According to a research conducted by sales department, a 10% reduction in sales price will result in 25% increase in unit sale. Prepare two income statements in contribution margin format, one using the current price and one using proposed price (10% below the old sales price).
SMC company manufactures a number of electric products. Rechargeable Battery is one of the SMC’s products that sells for Php180/unit. Total fixed expenses related to rechargeable Battery are Php270,000 per month and variable expenses involved in manufacturing this product are Php 126 per unit. Monthly sales are 8,000 Rechargeable Battery. According to a research conducted by sales department, a 10% reduction in sales price will result in 25% increase in unit sale. Prepare two income statements in contribution margin format, one using the current price and one using proposed price (10% below the old sales price).
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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- SMC company manufactures a number of electric products. Rechargeable Battery is one of the SMC’s products that sells for Php180/unit. Total fixed expenses related to rechargeable Battery are Php270,000 per month and variable expenses involved in manufacturing this product are Php 126 per unit. Monthly sales are 8,000 Rechargeable Battery.
- According to a research conducted by sales department, a 10% reduction in sales price will result in 25% increase in unit sale. Prepare two income statements in contribution margin format, one using the current price and one using proposed price (10% below the old sales price).
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