WalangLabel Company is a liquor company, the business has not been performing well this last few months due to the liquor ban imposed by the government. The company is considering whether it should shutdown temporarily for three months. The selling price and other costs of operating are presented below: Selling price P500 Variable manufacturing costs P280 per unit Variable selling costs P60 per unit Monthly Fixed costs: Manufacturing costs P250,000 Selling costs P120,000 Administrative costs P125,000 If the company will temporarily close it would incur P150,000 in retrenchment costs and P80,000 in reopening costs. Manufacturing costs and selling cost would not be incurred and administrative costs of P50,000 would be avoided per month if they decide to shut down. The company expects to sell 100 units per month if it would continue to operate. What is the shutdown point in sales?
15. WalangLabel Company is a liquor company, the business has not been performing well this last few months due to the liquor ban imposed by the government. The company is considering whether it should shutdown temporarily for three months. The selling price and other costs of operating are presented below:
Selling price P500
Variable
Variable selling costs P60 per unit
Monthly Fixed costs:
Manufacturing costs P250,000
Selling costs P120,000
Administrative costs P125,000
If the company will temporarily close it would incur P150,000 in retrenchment costs and P80,000 in reopening costs. Manufacturing costs and selling cost would not be incurred and administrative costs of P50,000 would be avoided per month if they decide to shut down. The company expects to sell 100 units per month if it would continue to operate.
What is the shutdown point in sales?
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