Compute for the number of guitar sales

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J&J Music Builders is a new business in the industry. Currently, they are producing and selling bamboo organs and flutes. They are planning to add guitar to their instruments. Based on the study conducted, the following are cost data related to the creation of conventional and electric guitars:

                                  Conventional                       Electric
Direct Materials       P1,200 / unit                     P1,800 per unit
Direct Labor               P1,800 / unit                       P450 / unit
Fixed Factroy Overhead  16,000                             47,970
Variable Factory Overhead  240 / unit                      720 / unit
Variable Selling Expense      80 / unit                  120 / unit

Problem 1: Compute for the number of guitar sales which would give J&J the same operating income when they choose either of the alternative presented above

Reference no: EM132746622

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