Data of Barbados Company:

Sales price P80

Variable cost per unit  35
Fixed Cost 499960

Management plans to improve the quality of its sole product by:

Replacing component from P2.00 to  P5.00
Acquiring a packaging machine of P200,000 with a useful life 10 and depreciated using the straigh

Requirements:
1.Assuming the management plans are reflected, how much is the total fixed cost?
2. Assuming the management plans are reflected, how much is the break-even sales amount?

Fixed Cost 499,960

Add:
Packaging Machine/Useful Life 20000
Total Fixed Cost 519,960

Quantity Per Unit Amount

Sales 12,999 80 1039920
Less: Variable Cost 12,999 40 519960
Contribution Margin 12,999 40 519960
Less:Fixed Cost 519,960
Net Operating Income -

Fixed Cost Contribution Margin (Per Unit) Break-even Point

519,960 40 12999
Contribution Margin Sales Per Unit Sales Amount
12,999 80 1039920
depreciated using the straight-line method.