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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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)
1. 15,000 units
2. 12,000 units
3. 16,500 units
4. 12,960 units
Transcribed Image Text:The Toy Company sells wooden board game. Their break-even sales volume is when they sell
75,000 units. Their actual sales volume is 100,000 and the company reported a net income of
P200,000. What is Toy Company's total fixed costs?
1. P 800,000
2. P 600,000
3. P 75,000
4. Insufficient information to determine the amount of total fixed costs
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