Solution-Estimate the company variable operating expenses

Estimate the company variable operating expenses per unit

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Reference no: EM132834242

Question - Layug Company is a distributor that has an exclusive franchise to sell a particular product made by another company. Layug Company's income statements for the last two years are given below:

	This Year	Last Year
Units sold	200,000	160,000
Sales revenue	P1,000,000	P800,000
Less cost of goods sold	600,000	480,000
Gross margin	400,000	320,000
Less operating expenses	260,000	244,000
Net operating income	P140,000	P76,000

Operating expenses are a mixture of fixed costs and variable and mixed costs that vary with respect to the number of units sold.

Required -

a. Estimate the company's variable operating expenses per unit, and its total fixed operating expenses per year.

b. Compute the Company's contribution margin for this year.

c. Compute operating income if sakes is 120,000 units.

Reference no: EM132834242

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Estimate the company variable operating expenses per unit

Reference no: EM132834242

Reference no: EM132834242

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