The firm’s tentative budget for next year includes: Sales- ₱400,000; Variable Expenses-₱250,000; Fixed Manufacturing Overhead- ₱80,000; Selling and Administrative Expenses-₱150,000. With a tax rate of 25%, the forecasted net income is ₱52,500. Mr. Bong, the marketing manager proposed an aggressive advertisement costing additional ₱25,000 that he predicts will result in a 25% unit sales increase. Assuming that Bong’s proposal will be incorporated into the budget, what should be the increase in the budgeted net income for next year? a. ₱12,000 b. ₱25,000 c. ₱103,125 d. ₱56,250 e. ₱37,500
The firm’s tentative budget for next year includes: Sales- ₱400,000; Variable Expenses-₱250,000; Fixed Manufacturing Overhead- ₱80,000; Selling and Administrative Expenses-₱150,000. With a tax rate of 25%, the forecasted net income is ₱52,500. Mr. Bong, the marketing manager proposed an aggressive advertisement costing additional ₱25,000 that he predicts will result in a 25% unit sales increase. Assuming that Bong’s proposal will be incorporated into the budget, what should be the increase in the budgeted net income for next year? a. ₱12,000 b. ₱25,000 c. ₱103,125 d. ₱56,250 e. ₱37,500
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 40P
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The firm’s tentative budget for next year includes: Sales- ₱400,000; Variable Expenses-₱250,000; Fixed Manufacturing Overhead- ₱80,000; Selling and Administrative Expenses-₱150,000. With a tax rate of 25%, the forecasted net income is ₱52,500. Mr. Bong, the marketing manager proposed an aggressive advertisement costing additional ₱25,000 that he predicts will result in a 25% unit sales increase. Assuming that Bong’s proposal will be incorporated into the budget, what should be the increase in the budgeted net income for next year?
a. ₱12,000
b. ₱25,000
c. ₱103,125
d. ₱56,250
e. ₱37,500
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