Solution-Determine what the profit would be

Determine what the profit would be

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Problem 1: A manufacturer produces a product that sells for P10 per unit. Variable costs per unit are P6 and total fixed costs are P12,000. At this selling price, the company earns a profit equal to 10% of total peso sales. By reducing its selling price to P9 per unit, the manufacturer can increase its unit sales volume by 25%. Assume that there are no taxes and that total fixed costs and variable costs per unit remain unchanged. If the selling price were reduced to P9 per unit, the profit would be

A. P3,000 C. P5,000

B. P4,000 D. P6,000

Reference no: EM132739043

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Determine what the profit would be

Reference no: EM132739043

Reference no: EM132739043

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