Without prejudice to your answers to previous questions, and assume that Davao plans to market its product in a new territory. Davao estimates that an advertising and promotion program costing P61,500 annually would need to be undertaken for the next two or three years. In addition, a P25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao’s current after-tax income of P94,500? Questions 5 to 8 are based on the Statement of Income of Davao, Inc. which representsthe operating results for the current fiscal year ending December 31. Davao had sales of1,800 tons of product during the current year. The manufacturing capacity of Davao'sfacilities is 3,000 tons of product. Consider each question's situation separately.Sales P900,000Variable costsManufacturingSelling costs 180,000Total variable costs P495,000Contribution margin P405,000P315,000Fixed costsP 90,000ManufacturingSellingAdministrationTotal fixed costsNet income before income taxes P157,500Income taxes (40%)(63,000)Net income after income taxes112,50045.000P247,500P 94,500

For maintaining same income after taxes, an entity need to compensate, additional promotion program…

Without prejudice to your answers to previous questions, and assume that Davao plans to market its product in a new territory. Davao estimates that an advertising and promotion program costing P61,500 annually would need to be undertaken for the next two or three years. In addition, a P25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao’s current after-tax income of P94,500?

Without prejudice to your answers to previous questions, and assume that Davao plans to market its product in a new territory. Davao estimates that an advertising and promotion program costing P61,500 annually would need to be undertaken for the next two or three years. In addition, a P25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao’s current after-tax income of P94,500?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 8EA: Using the information in the previous exercises about Marleys Manufacturing, determine the operating...

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