[PLEASE SHOW COMPLETE SOLUTION]

In the first quarter of the current year, Andoy Company had a breakeven point of P160,000 based on a selling price of P8 per unit and a fixed cost of P48,000. In the second quarter of the current year, the selling price and the variable cost did not change but the breakeven point increased to P250,000.

Required:

a. If the company wants to have a net income of P80,000 in the third quarter, compute the amount of sales? Use the formula method.

b. Compute the margin of safety and the margin of safety percentage.

c. Compute the degree of operating leverage.

d. If the sales in the fourth quarter increase by 20% from the third quarter, what is the net income in the fourth quarter? Use the formula method.