Question
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.
- What is the break-even point in units and pesos?
- What should be the level of sales in units and pesos to earn the desired profit if it is before tax?
- What should be the level of sales in units and pesos to earn the desired profit if it is after tax?
- What is the Margin of Safety for the target sales computed in requirement 3 in units, pesos, and percentage?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Intermediate Accounting IFRS Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
2nd Edition
1118443969, 978-1118443965
