In year 2020, E Corp has an operating leverage of 1.25, margin of safety of P 100,000 and Contribution margin ratio of 40%. If sales increased by 10% and fixed cost is P 10,000, what will be the net income in year 2021?

question 2

A company's current breakeven sales (BES) is 600,000. If fixed cost would increase by 20% of the current breakeven sales, such current BES would increase by 50%. What is the new Fixed cost from the new BES?

Answer rating: 100% (QA)

Net Income in Year 2021 To calculate the net income in year 2021 we need to determine the new contribution margin and fixed costs after the 10 increas... View the full answer