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Compute how many units must be sold to achieve a profit

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Reference no: EM132537322

Sunshine Inc., sells a single product. The company?s most recent income statement is given below:

Sales (4,000 units) P120,000

Less: Flexible expenses 68,000

Contribution margin P52,000

Less: Capacity-related expenses 40,000

Net income P12,000

Determine the following:

Question a. The contribution margin per unit is P__________.

Question b. If sales are doubled to P240,000, total flexible (variable) costs will equal to P__________.

Question c. If sales are doubled to P240,000, total capacity-related (fixed) costs will equal to P__________.

Question d. If 10 more units are sold, profits will increase by P___________.

Question e. Compute how many units must be sold to breakeven. _________________.

Question f. Compute how many units must be sold to achieve a profit of P20,000.

Reference no: EM132537322

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