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What is the company new break-even point in units

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Reference no: EM132528980

1. Renren Sales Company is the exclusive distributor for a revolutionary bookbag. The product sells for P60 per unit and has a CM ratio of 40%. The company's fixed expenses are P360,000 per year.

Required: Using the contribution margin method:

Question a. What are the variable expenses per unit?

Question b. What sales level in units and in sales pesos is required to earn an annual profit of P90,000?

Question c. Assume that through negotiation with the manufacturer the Renren Sales Company is able to reduce its variable expenses by P3 per unit. What is the company's new break-even point in units and in sales pesos.

Reference no: EM132528980

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