The Warner Company sells its only product for P30 and the variable costs amount to P21 per unit. Fixed cost for each year is P270,000. Questions: 1. Assuming the desired profit for next year (if all costs and selling price remains the same) is placed at P90,000, what is the margin of safety in units? 2. What will be the projected sales in pesos with such desired profits of P90,000? 3. If instead, the desired profit is 5% of sales, how many units must be sold to achieve such?
The Warner Company sells its only product for P30 and the variable costs amount to P21 per unit. Fixed cost for each year is P270,000. Questions: 1. Assuming the desired profit for next year (if all costs and selling price remains the same) is placed at P90,000, what is the margin of safety in units? 2. What will be the projected sales in pesos with such desired profits of P90,000? 3. If instead, the desired profit is 5% of sales, how many units must be sold to achieve such?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Warner Company sells its only product for P30 and the variable costs amount to P21 per unit. Fixed cost for each year is P270,000.
Questions:
1. Assuming the desired profit for next year (if all costs and selling price remains the same) is placed at P90,000, what is the margin of safety in units?
2. What will be the projected sales in pesos with such desired profits of P90,000?
3. If instead, the desired profit is 5% of sales, how many units must be sold to achieve such?
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