Reference no: EM132794250

The data below pertain to the forecasts of ABC Company for the upcoming year:

                                                 Total Cost                Unit Cost

Sales (22,000 units)              Php550,000           Php13.75

Raw materials                          88,000                2.20

Direct labor                                  154,000         3.85

Variable overhead                           44,000           1.10

Fixed overhead                            198,000               1.65

Variable selling and administrative expenses 66,000

Fixed selling and administrative expenses 123,750

problem 1: How many units does ABC Company need to produce and sell to make a before-tax profit of 10% of sales?

Option 1: 65,000 units
Option 2: 90,000 units
Option 3: 25,000 units
Option 4: 36,562 units

problem 2: Assuming that ABC Company sells 80,000 units, what is the maximum that can be paid for an advertising campaign while still breaking even?

Option 1: P 558,250
Option 2: P 382,250
Option 3: P 74,250
Option 4: P 294,250