Question
Cherry Mobile, Inc. reported the following information for the sales of their only product, Cherry phones: Total Per Unit Sales P31,500,000 P4,500 Variable expenses 9,450,000
Cherry Mobile, Inc. reported the following information for the sales of their only product, Cherry phones:
Total Per Unit
Sales P31,500,000 P4,500
Variable expenses 9,450,000 1,350
Contribution margin 22,050,000 P3,150
Fixed expenses 13,000,000
Net operating income P9,050,000
Cherry Mobile would like to increase their selling price by P500 per unit, and feel that this will decrease sales volume by 10%. Should Cherry increase the price, and what will the effect be on net operating income?
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Foster George, Srikand M. Datar, Maureen P. Gowing
5th Canadian Edition
0135004934, 978-0135004937
