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4.16 Diva Manufacturing Inc. produces two products: Product A and Product B Product A is a standard product with many competitors. Product B is
4.16 Diva Manufacturing Inc. produces two products: Product A and Product B Product A is a standard product with many competitors. Product B is a new product with few competitors. Sales of Product B are well above expected; however, Product A is losing market share lower priced competitors. Selling price per unit Product A obozo P15.00 Product B 19de P35.00 Variable costs per unit P7.50 aq ni P20.00 Monthly fixed costs (allocated) P450,000 dr P50,000 S Monthly sales in units 90,000 1350 C Instructions: 10,000 350 1. Compute the monthly sales level in units at which Product B makes a profit of 20% on sales. 2. Management is considering reducing the price of the Product A. If sales are 90,000 units per month, what is the breakeven price for the Product A?
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Answer 1 12500 units 2 1050 Explanation 1 To calculate the monthly sales level in units at which Pro...Get Instant Access to Expert-Tailored Solutions
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