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Problem - PIOLO, Inc. sells Product X to retailers for P200. The unit variable cost is P40 with a selling commission of 10%. Fixed manufacturing cost totals P1,000,000 per month, while fixed selling and administrative cost equals P420,000. The income tax rate is 30%. What the target sales if after tax income is P123,200?
Prepare the adjustments and post the adjustments to the T-accounts adding any new T-accounts you need, prepare an income statement and prepare a statement of changes in retained earnings.
Administrative costs would be caused by the order. Further, the acceptance of this order will not affect regular sales. Should the offer be accepted?
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