Carl's firm produces cotton fabrics. He has Fixed costs of about P250,000 and has variable costs of around P400 on a monthly basis. Currently, Carl's firm sells 150 yards of cotton fabrics priced at P2,400 per unit.

• How much is the current profitability of Carl's cotton business?
• Carl would like to improve his price by 2% in the next reporting period. What is the impact of this change in profitability?
• Carl would like to improve his Variable Costs by 2% in the next reporting period. What is the impact of this change in profitability?
• Carl would like to improve the quantity sold by 10% in the next reporting period. What is the impact of this change in profitability?

Answer rating: 100% (QA)

a Revenue can be computed as Quantity Sold Price per unit 150 P2400 P360000 Total Costs can be compu... View the full answer