The Power Company sells its product at P15.00 per unit. The variable cost is P9.00 per unit. Total fixed cost is P12,000. Current sales amounted to P45,000 17.If sales decerease by 500 units, by how much would fixed expenses have to be reduced to maintain the current net income? a. P7,500 b. P6,000 c. P3,000 d. P2,000
The Power Company sells its product at P15.00 per unit. The variable cost is P9.00 per unit. Total fixed cost is P12,000. Current sales amounted to P45,000 17.If sales decerease by 500 units, by how much would fixed expenses have to be reduced to maintain the current net income? a. P7,500 b. P6,000 c. P3,000 d. P2,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:18.At a break-even point of 400 units, the variable costs P400 and the fixed costs
The Power Company sells its product at P15.00 per unit. The variable cost is
P9.00 per unit. Total fixed cost is P12,000. Current sales amounted to P45,000
17.If sales decrease by 500 units, by how much would fixed expenses have to be
P9.00 per
reduced to maintain the current net income?
a. P7,500
b. P6,000
с. Р3,000
d. P2,000
were P200. What will the 401st unit sold contribute to profit before tax?
a. Po
b. PO.60.
c. P1.00
d. P1.50
The statement of comprehensive income for Blanche Company for the current
year is presented below
Sales
Variable costs
P 400,000
125,000
275,000
200,000
p 75,000
19. What is the degree of operating leverage of Blanche Company
Contribution margin
Fixed costs
Income before tax
a.3.67
b.1.45
с. 5.33
d. 1.67
The following information pertains to Ellery Company. Budgeted sales -
P1,000,000, break even sales - P700,000, budgeted contribution margin -
P600,000.
20.The margin of safety for the Ellery Company is
a. P300,000
b. P400.000
c. P500,000
d. P600,000
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