Question

The ASIAN Transmission company makes and sells certain automotive parts present sales volume is 500,000 units per year at selling price of fifty centavos (₱0.50) per unit. Fixed expenses total ₱80, 000 per year.
5. What is the present total profit for a year?
6. What is the breakeven units of productions?

Answer 1

Answer:

  5. ₱170,000

  6. 160,000 units

Explanation:

5. At a sales volume of 500,000 units, the revenue is ...

  ₱0.50 × 500,000 = ₱250,000

The profit s the difference between revenue and cost:

  profit = ₱250,000 -₱80,000

  profit = ₱170,000

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6. The break-even quantity is the number that produces a revenue equal to cost:

  ₱0.50×q = ₱80,000

  q = ₱80,000/₱0.50 = 160,000

The break-even quantity is 160,000 units.