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The income statement of LENIKIKO Company is as follows: Sales Variable costs Contribution Margin Fixed Expenses Net Income 1,200,000 456,000 744,000 590,000 144,000 LeniKiko
The income statement of LENIKIKO Company is as follows: Sales Variable costs Contribution Margin Fixed Expenses Net Income 1,200,000 456,000 744,000 590,000 144,000 LeniKiko produces single product. The income statement is based on sales of 200,000 units. REQUIRED: 1. Compute for the Breakeven Point in unit and Pesos 2. Suppose the selling price increases by 10%. Will breakeven point increase or decrease? Show your proof. 3. Ignore, requirement #2, suppose that the variable cost per unit increases by $0.35. Will the Break Even Point Increase or Decrease? 4. Can you predict whether the breakeven point increases or decreases if both the selling price and the unit variable cost will increase? Recompute the Break Even Point incorporating both changes in Requirement 2 & 3. 5. Assume all other information remains constant except that Fixec Costs increase by 50,000. Will Break Even Point increase or decrease? Recompute it.
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