Mr. Ador Estoria, the operations manager of Achos Merchandising Corp. Is worried about the result of its operation this year. Although the accounting dept. has not submitted the financial statements yet, the following data where already available pertaining to year 2020. Total number of units sold at P50 per unit price 120,000 units Total fixed costs and expenses P1,800,000 Variable cost rate 60% Because of other pressing problems, he hired you to give him information and computation that will help him plan for the next year operation. He specifically wants the following (with proofs, if possible): If management projects a profit of P1,200,000 after the 25% tax, how many units should be sold? If the total peso sales generated next year is short by P1million in order to break-even, what is the result of the operation? If the selling price per unit next year is reduced by 10% and an increase in variable cost per unit by 5% due to the increase in the price of the supplier but this will result in increase in quantity sold next year by 50%. What would be the result of the operation? (use the contribution margin format)

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter6: Statistical Inference

Section: Chapter Questions

Problem 24P: The manager of an automobile dealership is considering a new bonus plan designed to increase sales...

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Mr. Ador Estoria, the operations manager of Achos Merchandising Corp. Is worried about the result of its operation this year. Although the accounting dept. has not submitted the financial statements yet, the following data where already available pertaining to year 2020.

Total number of units sold at P50 per unit price 120,000 units

Total fixed costs and expenses P1,800,000

Variable cost rate 60%

Because of other pressing problems, he hired you to give him information and computation that will help him plan for the next year operation. He specifically wants the following (with proofs, if possible):

If management projects a profit of P1,200,000 after the 25% tax, how many units should be sold?
If the total peso sales generated next year is short by P1million in order to break-even, what is the result of the operation?
If the selling price per unit next year is reduced by 10% and an increase in variable cost per unit by 5% due to the increase in the price of the supplier but this will result in increase in quantity sold next year by 50%. What would be the result of the operation? (use the contribution margin format)

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