FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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This topic is about CVP Analysis. Please check the photo for the problem.

CASE 2: ORANGE COMPANY
Orange Company buys Product A for P15 per units and sells them for P25 per unit. There are
no other variable costs. Fixed cost is P6,000. Use the breakeven formula to determine the
following:
a. Revenue, cost and profit functions.
b. The sales volume when profit is P8,000.
c. The profit when sales volume is 400 units.
d. The breakeven revenue and quantity.
e. The new variable cost per unit in order to breakeven at 500 units, assuming the selling
price and the fixed cost remain constant.
The new fixed cost in order to breakeven at 800 units, assuming the selling price and the fixed
cost remain constant.
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Transcribed Image Text:CASE 2: ORANGE COMPANY Orange Company buys Product A for P15 per units and sells them for P25 per unit. There are no other variable costs. Fixed cost is P6,000. Use the breakeven formula to determine the following: a. Revenue, cost and profit functions. b. The sales volume when profit is P8,000. c. The profit when sales volume is 400 units. d. The breakeven revenue and quantity. e. The new variable cost per unit in order to breakeven at 500 units, assuming the selling price and the fixed cost remain constant. The new fixed cost in order to breakeven at 800 units, assuming the selling price and the fixed cost remain constant.
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