Sunshine Company's single product has a selling price of P25 per unit. Last year the company reported a profit of P20,000 and variable expenses totaling P180,000. The product has a 40% contribution ratio. Because of competition, Sunshine Company will be forced in the current year to reduce its selling price by P2 per unit. How many units must be sold in the current year to earn the same profit as was earned last year? (Hint: Prepare last year's income statement, then, prepare the current year using the new price)
Sunshine Company's single product has a selling price of P25 per unit. Last year the company reported a profit of P20,000 and variable expenses totaling P180,000. The product has a 40% contribution ratio. Because of competition, Sunshine Company will be forced in the current year to reduce its selling price by P2 per unit. How many units must be sold in the current year to earn the same profit as was earned last year? (Hint: Prepare last year's income statement, then, prepare the current year using the new price)
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5EA: Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of...
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