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How many units would the company need to sell

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Reference no: EM133032413

Question - Speedy Mouse Inc. makes a special mouse for computers. Each mouse sells for Php25 and annual production and sales are 120,000 units. Costs for each mouse are as follows:

Direct material Php 6.00

Direct labor 3.00

Variable overhead 0.80

Variable selling expenses 2.20

Total variable cost Php 12.00

Required -

a. How much peso sales must be generated to earn before tax profit of P203,450?

b. Calculate the contribution margin ratio for the product.

c. Calculate the peso break-even point using the contribution margin ratio

d. How many mice must the company sell if it desires to earn P996,450 in before - tax profits?

e. How many units would the company need to sell to break even if its fixed costs increased by P7,865? (Use original data

f. Determine the break-even point in number of mice

g. Speedy Mouse Inc. has received an offer to provide a one-time sale of 4,000 mice to a network of computer superstores. This sale would not affect other sales or their costs, but the variable cost of the additional units will increase by P0.60 for shipping would and fixed costs by P18,000. The selling should price for each unit in this order would be P20. Based on quantitative measurement, should the company accept this offer?

Reference no: EM133032413

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