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The income statement for one of Manhattan Companys products shows: : Sales (100 units at Php 100 a unit) 10,000 Cost of goods sold: Direct

The income statement for one of Manhattan Company’s products shows: :

Sales (100 units at Php 100 a unit) 10,000

Cost of goods sold:

Direct labor 1,500

Direct materials used 1,400

Variable factory overhead 1,000

Fixed factory overhead 500 4,400

Gross profit 5,600

Marketing expenses:

Variable 600

Fixed 1,000

Administrative expenses:

Variable 500

Fixed 1,000 3,100

Operating income 2,500

Required:

1. Compute the break-even point in units.

2. If sales increase by 25% how much will be the new operating income?

3. Compute the new break-even point in pesos if fixed factory overhead will increase by Php 1,700.

 

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