16. Smirnoff Corp. invested P31,250,000 in a cabinet-making business. It expects to earn a 25% return...

Transcribed Image Text:

16. Smirnoff Corp. invested P31,250,000 in a cabinet-making business. It expects to earn a 25% return on its investment in equipment used in the manufacturing the cabinets. Its consultants estimate that 10,000 units of cabinets next year. Estimated costs per unit of cabinet at this level follows: Variable manufacturing costs = P1,562.50; Fixed selling and administrative co! = P625.00; Fixed manufacturing costs = P312.50. To accomplish the company objective, one cabinet should be priced at: 17. Boss, Inc. has consistently generated these operating results for the past several years: Sales 100% Cost of sales Variable 50% Fixed 10% 60% Gross profit 40% Operating Expenses Variable Fixed Operating Income 20% 15% 35% 5% For the coming year, the expected total sales amounts to P19.50 million. In pesos, how much should be the break-even sales? ! Answer questions 18 and 19 based on the given data: Vicks Inc. Produced and sold 240,000 bags of organic fertilizer as follows: Sales revenue P1,896,000 Fixed costs: Manufacturing margin 1,092,000 Manufacturing P520,000 Contribution Margin 912,000 Selling & administrative 270,000 18. The company's margin of safety in units is closest to: 19. The company's degree of operating leverage is closest to: 16. Smirnoff Corp. invested P31,250,000 in a cabinet-making business. It expects to earn a 25% return on its investment in equipment used in the manufacturing the cabinets. Its consultants estimate that 10,000 units of cabinets next year. Estimated costs per unit of cabinet at this level follows: Variable manufacturing costs = P1,562.50; Fixed selling and administrative co! = P625.00; Fixed manufacturing costs = P312.50. To accomplish the company objective, one cabinet should be priced at: 17. Boss, Inc. has consistently generated these operating results for the past several years: Sales 100% Cost of sales Variable 50% Fixed 10% 60% Gross profit 40% Operating Expenses Variable Fixed Operating Income 20% 15% 35% 5% For the coming year, the expected total sales amounts to P19.50 million. In pesos, how much should be the break-even sales? ! Answer questions 18 and 19 based on the given data: Vicks Inc. Produced and sold 240,000 bags of organic fertilizer as follows: Sales revenue P1,896,000 Fixed costs: Manufacturing margin 1,092,000 Manufacturing P520,000 Contribution Margin 912,000 Selling & administrative 270,000 18. The company's margin of safety in units is closest to: 19. The company's degree of operating leverage is closest to: