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Davao Company sells its only product at P30 per unit. Variable costs are P22 per unit and fixed costs are P100,000 per month.
Required: Treat each question independently from the others.
Question 1: What unit sales are required to earn P50,000 for the month?
Question 2: What sales, in pesos, are required to earn P50,000 for the month?
Question 3: Suppose Davao reduces its selling price to P28 because competitors are charging that amount. What is its new break-even point (a) in units and (b) in pesos?
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