You want to establish your own business and are thinking about releasing a new product. Customers will pay P150 for it, according to market research, and your sales team believes they can sell at least 1,000 units every month. The equipment you'll need to make the product will require a monthly fixed cost of P400,000 and lease of facility at P500,000. Costs of producing the product are direct labor P20, direct materials P15, shipping P5 and sales commission P10. What is the breakeven point? Will this be a profitable venture? Justify you answer.
You want to establish your own business and are thinking about releasing a new product. Customers will pay P150 for it, according to market research, and your sales team believes they can sell at least 1,000 units every month. The equipment you'll need to make the product will require a monthly fixed cost of P400,000 and lease of facility at P500,000. Costs of producing the product are direct labor P20, direct materials P15, shipping P5 and sales commission P10. What is the breakeven point? Will this be a profitable venture? Justify you answer.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:You want to establish your own business and are thinking about releasing a new product. Customers will pay
P150 for it, according to market research, and your sales team believes they can sell at least 1,000 units every
month. The equipment you'll need to make the product will require a monthly fixed cost of P400,000 and lease of
facility at P500,000. Costs of producing the product are direct labor P20, direct materials P15, shipping P5 and
sales commission P10. What is the breakeven point? Will this be a profitable venture? Justify you answer.
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