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Management Review 20
Management Review 20
A company that sells its single product for P40 per unit had after-tax net income for the
past year of P1,188,000 after applying an effective tax rate of 40%. The projected costs
for manufacturing and selling its single product in the coming year are listed below.
Variable costs per unit:
Direct material, P5.00
Direct labor, P4.00
Manufacturing overhead, P6.00
Selling and administrative costs, P3.00
Total variable cost per unit, P18.00
Annual fixed operating costs:
Manufacturing overhead, P6,200,000
Selling and administrative costs, P3,700,000
Total annual fixed cost, P9,900,000
The peso sales volume required in the coming year to earn the same after-tax net
income as the past year is 21600000
Question 272 pts
Slosh Cleaning Corporation services both residential and commercial customers. Slosh
expects the following operating results next year for each type of customer:
Residential Commercial
Sales P60,000 P140,000
Contribution margin ratio 50% 30%
Slosh expects to have P50,000 in fixed expenses next year. What would Slosh's peso
sales revenues from Commercial customers have to be next year in order to generate a
profit of P166,000? 420000