Question
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
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?
Step by Step Solution
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Step: 1
a Revenue can be computed as Quantity Sold Price per unit 150 P2400 P360000 Total Costs can be compu...
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Step: 3
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Cost management a strategic approach
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
5th edition
73526940, 978-0073526942
