Solution-How much would sales have to increase to give davao

How much would sales have to increase to give davao

Reference no: EM132620393

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: Suppose that fixed costs are expected to increase by P10,000 per month and price remains at P30. What is the new break-even point (a) in units and (b) in pesos?

Question 2: Suppose Davao is currently selling 10,000 units per month. The marketing manager believes that sales would increase if advertising were increased by P5,000. How much would sales have to increase, in units, to give Davao the same income or loss that it is currently earning? (Although, you know how many units are now being sold, you do not need this fact to solve the problem.)

Reference no: EM132620393

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How much would sales have to increase to give davao

Reference no: EM132620393

Reference no: EM132620393

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