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Question. Bridget Company makes and sells a popular household product and its annual sales average 15,000 units at P 52 each . Details of unit
Question. Bridget Company makes and sells a popular household product and its annual sales average 15,000 units at P 52 each . Details of unit cost are as follows: Direct materials P 15 Direct labor 12 Variable Overhead 6 Fixed Overhead 9 Total 42 Annual fixed administrative and selling expenses,P 65,000 ; variable selling expenses per unit , P 3. Sales depend mostly on customers traveling along road in front of the company, but because of road construction which will take three months to complete, sale are expected to go down to 2,000 units during the construction period. Hence management plans to close for 6 months and avoid 60% of Fixed Overhead costs but additional shutdown costs of P16,500 will be incurred for security and minimum maintenance. units The shutdown point is
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