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. Thecompany is considering whether it should shutdown temporarily for three months. The selling price and other costs of operating are presented below:Selling priceP500Variable manufacturing costsP280 per unitVariable selling costsP60 per unitMonthly Fixed costs:Manufacturing costsP250,000Selling costsP120,000Administrative costsP125,000If 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 notbe 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 itwould continue to operate.What is the shutdown point in sales?

The manufacturing cost is the total cost of all resources used in the manufacture of a product. The…

wn temporarily for three months. The selling price and other c 00 -280 per unit -60 per unit 50,000 20,000 25,000 ur P150,000 in retrenchment costs and P80,000 in reopening would be avoided per month if they decide to shut down. The

wn temporarily for three months. The selling price and other c 00 -280 per unit -60 per unit 50,000 20,000 25,000 ur P150,000 in retrenchment costs and P80,000 in reopening would be avoided per month if they decide to shut down. The

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Red Hawk, Incorporated, is considering a change in its cash-only sales policy. The new terms of sale would be net one month. The required return is .62 percent per month. Current Policy New Policy Price per unit $ 760 $ 760 Cost per unit $ 555 $ 555 Unit sales per month 820 870 Calculate the NPV of the decision to switch. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Jamestown Industries sells $48,000 in gift cards and expects 20% breakage. Cost of goods sold is 25% of each gift card. When the expected gift cards are redeemed, how much cost of goods sold will Jamestown record? O $12,000 $24,000 O $10,000 O $9,600
e. 5,000 XYZ company is studying the profitability of a change in operation and has gathered the following information. Current Operation: Fixed Costs: $38,000, Selling Price: $16, Variable Cost: $10, and Sales (Units): 9,000. Anticipated Operation: Fixed Costs: $48,000, Selling Price: $22, Variable Cost: $12, and Sales (Units): 6,000. Should XYZ company make the change? Select one: O a. No, because sales will drop by 3,000 units. Ob. It is impossible to judge because additional information is needed. Oc. No, because the company will be worse off by $4,000. O d. Yes, the company will be better off by $6,000. Oe. No, because the company will be worse off by $22000. Next page
Red Hawk, Incorporated, is considering a change in its cash-only sales policy. The new terms of sale would be net one month. The required return is .96 percent per month. Current Policy New Policy Price per unit $ 1,100 $ 1,100 Cost per unit $ 910 $ 910 Unit sales per month 1,160 1,260 Calculate the NPV of the decision to switch. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Typing only. ..
D) Brolin Company sells a single product. The product has a selling price of $50 and variable expenses of 80% of sales. If the company's fixed expenses total $150,000 per year, what is the company's break-even point in sales dollars? per unit $750,000 A) $187,500 B) $15,000 C) $3,750 D) Page 2 of 4 O 48°F Sunny re to search