Question
A process making 2000 metric tons of a product selling for P1.60 per kg. total cost of production is 84.375% of the total sales while
A process making 2000 metric tons of a product selling for P1.60 per kg. total cost of production is 84.375% of the total sales while the ratio of the fixed cost to the variable cost is 0.35:1.0. Variable costs consist of 50% labor cost and 40% raw material cost. if the management proposes increasing the selling price by 10% due to 20% increase in the cost of its raw materials,
a. determine the peso change in net profit at full capacity if tax rate is 34%
b. determine the % change in the breakeven point
c. determine the fixed cost per poundat new break even point
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