Aga Corp is a newly organized company planning to produce and sell customized rubber shoes to be used mostly by athletes and students in different school levels. Since the company is new to the market, it is anxious and it would like to seek for your help in its profit planning and breakeven point determination

The cost structure of the product at 20,000 units is a s follows:

Variable Cost:

Manufacturing Cost P 6.00

Non-manufacturing 2.00

Fixed cost (per month):

Manufacturing P 250,000

Non-manufacturing 150,000

Agas marketing department has predicted that the demand for the companys product will exceed its 20,000 units that it can produce and sell. Additional manufacturing space can be rented from another company at a fixed cost of P40,000 per month with a variable cost totaling P12 per unit. The companys selling price us P18 per unit.

The breakeven point per month of the product is:

1. 60,000 units
2. 46,667 units
3. 40,000 units