The Flashtic Co. sells a special type of flashlights which does not use dry-cell batteries but operates with “sun energy”. The product would incur a total variable cost of P18 per unit to manufacture and sell. The plant has a capacity of 20,000 units per month at P180,000 fixed costs and expenses, excluding its monthly interest charges of P45,000. This product has a contribution margin of 55%. At present the plant is operating at 80% of its capacity. Management plans to increase its current sales by 20% next year. Question: If the number of units sold exceeded the break-even point by 650 units, how much is the profit or loss?
The Flashtic Co. sells a special type of flashlights which does not use dry-cell batteries but operates with “sun energy”. The product would incur a total variable cost of P18 per unit to manufacture and sell. The plant has a capacity of 20,000 units per month at P180,000 fixed costs and expenses, excluding its monthly interest charges of P45,000. This product has a contribution margin of 55%. At present the plant is operating at 80% of its capacity. Management plans to increase its current sales by 20% next year. Question: If the number of units sold exceeded the break-even point by 650 units, how much is the profit or loss?
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
Problem 1PS
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The Flashtic Co. sells a special type of flashlights which does not use dry-cell batteries but operates with “sun energy”. The product would incur a total variable cost of P18 per unit to manufacture and sell. The plant has a capacity of 20,000 units per month at P180,000 fixed costs and expenses, excluding its monthly interest charges of
P45,000. This product has a contribution margin of 55%. At present the plant is operating at 80% of its capacity. Management plans to increase its current sales by 20% next year.
Question: If the number of units sold exceeded the break-even point by 650 units, how much is the profit or loss?
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