Question
Sunshine Inc., sells a single product. The companys most recent income statement is given below: Sales (4,000 units) P120,000 Less: Flexible expenses 68,000 Contribution margin
Sunshine Inc., sells a single product. The companys most recent income statement is given below:
Sales (4,000 units) P120,000
Less: Flexible expenses 68,000
Contribution margin P52,000
Less: Capacity-related expenses 40,000
Net income P12,000
Determine the following:
a. The contribution margin per unit is P__________.
b. If sales are doubled to P240,000, total flexible (variable) costs will equal to P__________.
c. If sales are doubled to P240,000, total capacity-related (fixed) costs will equal to P__________.
d. If 10 more units are sold, profits will increase by P___________.
e. Compute how many units must be sold to breakeven. _________________.
f. Compute how many units must be sold to achieve a profit of P20,000.
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