Calculate the effect on the companys expected profits

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Problem: Refer to original data. Creative Wood is considering adding a retail outlet. This will increase common fixed cost by P70,000 per year. As a result of adding the retail outlet, the additional publicity and emphasis on quality will allow the firm to change the sales mix to 1:1. The retail outlet is also expected to increase sales by 30%. Assume that the outlet is opened at the beginning of the sixth month. Calculate the effect on the company's expected profits for the current year, and calculate the new one break-even point. Assume that fixed costs are incurred uniformly throughout the year.

Reference no: EM133326064

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