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Question - Machan Co.'s year-end income statement is as follows:
Sales (20,000 units) P360,000
Variable costs 220,000
Contribution margin P140,000
Fixed costs 105,000
Net income P 35,000
Management is unhappy with the results and plans to make some changes for next year. If management implements a new marketing program, fixed costs are expected to increase by P19,200 and variable costs to increase by P1 per unit. Unit sales are expected to increase by 15 percent. What is the effect on income if the foregoing changes are implemented?
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