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XYZ Inc. sell Product Y at P5 per unit. The variable costs of making and selling each unit is P3 while the total fixed cost

XYZ Inc. sell Product Y at P5 per unit. The variable costs of making and selling each unit is P3 while the total fixed cost is P2,000. The company wants to earn a profit of P3,000. The company is subject to 40% tax rate.

  1. What should be the level of sales in units and pesos to earn the desired profit if it is after tax?
  2. What is the Margin of Safety for the target sales computed in requirement 3 in units, pesos, and percentage?

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