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Question - SadBoi, Inc. produces high quality water-proof tissue papers. Mr. Ramos, Sadboi's Managerial Accountant, has developed an annual formula using observations from the production of 10,000 to 25,000 units to estimate its production costs; Y = P960,000 + P93(x). He sells each roll for P170. Commissions paid to sales agents are 10% of sales. Sadboi's monthly fixed costs are as follows:
-Overhead costs - P80,000
-Selling and administrative expenses - P20,000.
Required -
1) How much is the break-even point in sales?
2) Assuming the Company is currently producing 23,000, how much is the percentage increase in profit if units sold increases by 40% for the following year?
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