Problem 1

X company expects that the volume of sales will drop below the current level of 5,000 units per month. An operating statement prepared for the monthly sales of 5,000 units are as follows:

Sales (5,000 at 3.00) 15,000 Less: Variable cost at 2.00 10,000 Non variable cost 5,000 Net Income If the plant operations are suspended, the following cost will still (remain) be incurred: plant maintenance of P 1,000 and insurance/taxes of P 1,000. Since there is no immediate possibility of profit under present conditions, the problem of the company is just how to minimize the loss. Based on the data above, compute the shutdown point in pesos