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A digitized music tuner has been a staple in Smooth Sounds' product line for several years. Annual fixed costs of production and administration related
A digitized music tuner has been a staple in Smooth Sounds' product line for several years. Annual fixed costs of production and administration related to this product in the past have been P643,500. Variable costs of production and sales have been P17 per unit. The selling price in the past has been P28 per unit. For the year just ended, the company sold 100,000 units. In the coming year, based on the appearance of competing products on the market, the company expects a decrease of 10 percent in unit sales. Assuming that the company wants a profit before tax of P405,000, what is the required selling price if it expects to sell 90,000 units?
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Based on the information provided the company needs to sell their digitized music tuners at a price of P3333 per unit to achieve a profit before tax of P405000 given that they expect to sell 90000 uni...Get Instant Access to Expert-Tailored Solutions
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