8. Madel Company manufactures a single eledronic produd called Walastik. Walastik sels for P900 per unit. In 2000, the following variable costs were incurred to produce each Walastik device. Direct labor P180 Direct materials 240 Factory overhead 105 Selling costs 75 Total variable costs P600 Madel is subject to 40 percent income tax rate, and annual fixed costs are P6,600,000. Except for an operating loss incurred in the year of incorporation, the firm has been profitable over the last five years. In 2001, a significant change in Madel's production technology caused a 10% increase in annual fixed costs and a 20% unit cost increase in the direct labor component as a result of higher skilled direct labor. However, this change permitted the replacement of a costy imported component with a local component. The effect was to reduce unit material costs by 25%. There has been no change in the Walastik selling price. The annual sales units required for Madel to breakeven are: A. B. C. D. 2000 22,000 22,000 14,000 14,000 2001 20,840 22,407 22,407 20,840 8. Madel Company manufactures a single eledronic produd called Walastik. Walastik sels for P900 per unit. In 2000, the following variable costs were incurred to produce each Walastik device. Direct labor P180 Direct materials 240 Factory overhead 105 Selling costs 75 Total variable costs P600 Madel is subject to 40 percent income tax rate, and annual fixed costs are P6,600,000. Except for an operating loss incurred in the year of incorporation, the firm has been profitable over the last five years. In 2001, a significant change in Madel's production technology caused a 10% increase in annual fixed costs and a 20% unit cost increase in the direct labor component as a result of higher skilled direct labor. However, this change permitted the replacement of a costy imported component with a local component. The effect was to reduce unit material costs by 25%. There has been no change in the Walastik selling price. The annual sales units required for Madel to breakeven are: A. B. C. D. 2000 22,000 22,000 14,000 14,000 2001 20,840 22,407 22,407 20,840