Civil Engineering Online Review

A factory has production capacity of 4000 units per moth with an efficiency of 80%.

Fixed operating cost  P800,000 a month

Variable and material cost = P200/unit

Selling price per unit = P500

Find profit in pesos per moth.

Solution:

Income = 4,000(0.80)(500)

Income = P1,600,000

Expenses = 4,000(0.80)(200) + 800,000

Expenses = P1,440,000

Profit = 1,600,000 – 1,440,000

Profit = P160,000.00