A telecommunications business may produce 500, 000 units per month. The company generates a total monthly income of P350, 000, 000 at its current capacity of 350, 000 units per month. The firm has a fixed monthly cost of P100, 000, 000 and a variable monthly cost of P200 per unit. a. What is the present profit or loss in millions of pesos? b. What is the break even quantity? c. If the production is increased to 80% of its capacity what is the profit or loss in millions of pesos?

A telecommunications business may produce 500, 000 units per month. The company generates a total monthly income of P350, 000, 000 at its current capacity of 350, 000 units per month. The firm has a fixed monthly cost of P100, 000, 000 and a variable monthly cost of P200 per unit. a. What is the present profit or loss in millions of pesos? b. What is the break even quantity? c. If the production is increased to 80% of its capacity what is the profit or loss in millions of pesos?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.1IP

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