Snow Company presented the following data relating to their product.: Cost per unit: Direct Materials P8.0 Direct Labor 6.0 Variable Factory Overhead Fixed Factory Overhead (based on a normal capacity Of 10,000 units) 4.0 2.0 The total fixed operating costs amounted to P40,000 and the variable selling and administr expenses were P20,00. The product sells for P25.00/unit and the company produced 12,000 units and sold 10,000 the month. Requirement: 1. Their break-even sales. 2. Their sold units to generate a net profit of P20,000 before tax. Their sold units to generate a 10% income based on sales 3.
Snow Company presented the following data relating to their product.: Cost per unit: Direct Materials P8.0 Direct Labor 6.0 Variable Factory Overhead Fixed Factory Overhead (based on a normal capacity Of 10,000 units) 4.0 2.0 The total fixed operating costs amounted to P40,000 and the variable selling and administr expenses were P20,00. The product sells for P25.00/unit and the company produced 12,000 units and sold 10,000 the month. Requirement: 1. Their break-even sales. 2. Their sold units to generate a net profit of P20,000 before tax. Their sold units to generate a 10% income based on sales 3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Pls, answer the ff.
Transcribed Image Text:Snow Company presented the following data relating to their product.:
Cost per unit:
Direct Materials
P8.0
Direct Labor
6.0
Variable Factory Overhead
Fixed Factory Overhead
(based on a normal capacity
Of 10,000 units)
4.0
2.0
The total fixed operating costs amounted to P40,000 and the variable selling and administrative
expenses were P20,00.
The product sells for P25.00/unit and the company produced 12,000 units and sold 10,000 during
the month.
Requirement:
1. Their break-even sales.
2. Their sold units to generate a net profit of P20,000 before tax.
Their sold units to generate a 10% income based on sales
4. Their selling price/unit to achieve a net income of P21,000 before tax, assuming that the company
shall be spending an additional P15,000 for advertising in order to increase its present sales
volume by 20%.
5. Considering your recommended SPU in #4 and further assuming that the total fixed costs
inclusive of advertising amount to 75,000, their break-even sales in units.
6. Supposing that the total break-even sales were P350,000 and considering the given fixed costs,
their maximum amount that they could spend for advertising?
3.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education