2. Mostkuno Company is making plans for next year, using the CVP analysis as it planning tool. Next year's sales data about its product

Question

36 users unlocked this solution today!

2. Mostkuno Company is making plans for next year, using the CVP analysis as it planning tool. Next year's sales data about its product are as follows: Selling price Variable manufacturing cost per P60.00 22.50 4.50 unit Variable selling and administrative cost Fixed operating costs (60% is P148,500.00 manufacturing cost) Income tax rate 30% Assume that Mostkuno's management learned that a new technology that will increase the quality of its product is available. If implemented, its projection for next year will be changed: . The selling price of the product will increase to P75 per unit. Fixed manufacturing costs will increase by 20% Additional advertising cost will be incurred to promote the higher quality product. This will increase fixed non-manufacturing cost by 10%. The improve product will require a new material that will increase direct material cost by P4.50 If the new technology is adopted, how much sales should the company make to earn a pre-tax profit of 10% on sales?