3. After reviewing its cost structure (variable costs of P7.50 per unit and monthly fixed costs of P60,000) and potential market, F Company established what it considered to be a reasonable selling price. The company expected to sell 50,000 units per month and planned its monthly results as follows: Sales . . P500,000 Variable costs . 375,000 Contribution margin . 125,000 Fixed costs . 60,000 ................. Income before taxes 65,000 Income tax (40%) 26,000 Net income . P 39,000 Using the above information, compute the following: a. What selling price did the company establish. b. What is the contribution margin per unit? c. What is the break even point in units?

3. After reviewing its cost structure (variable costs of P7.50 per unit and monthly fixed costs of P60,000) and potential market, F Company established what it considered to be a reasonable selling price. The company expected to sell 50,000 units per month and planned its monthly results as follows: Sales . . P500,000 Variable costs . 375,000 Contribution margin . 125,000 Fixed costs . 60,000 ................. Income before taxes 65,000 Income tax (40%) 26,000 Net income . P 39,000 Using the above information, compute the following: a. What selling price did the company establish. b. What is the contribution margin per unit? c. What is the break even point in units?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

b) Tara Company produces a single product. The projected income statement for the coming year is as follows: RM1,800,000 Sales (40,000 units @ RM45) Total variable cost 1,044,000 Contribution margin RM 756,000 Total fixed cost 733,320 Operating income RM 22,680 (Note: Round all RM value answers to the nearest dollar. Round contribution margin ratio and degree of operating leverage to two decimal places.) Required: i. Solve the break-even sales value (RM). ii. Solve the margin of safety in sales value (RM). iii. Solve the degree of operating leverage.
Choose the correct letter of answer At a price of P20, the estimated Magnolia Company’s monthly sales of product is 10,000 units. Variable costs include manufacturing, P6, and distribution, P2. Fixed costs are P24,000 per month. Determine the monthly margin of safety. a. P120,000b. P80,000c. P160,000d. P200,000
1.
A projected income statement of Hailwork’s company for the coming year follows: Sales $506300 |Total Variable Cost 170865 Contribution Margin ? Total Fixed Cost 175000 Operating Income ? Compute contribution margin and contribution margin ratio Compute the Operating Income How much revenue must be earned in order to breakeven What is the effect on contribution margin ratio if the unit selling price and unit variable cost increase by 10 percent each?
need answer of this question
Ajani Company has variable costs equal to 40% of sales. The company is considering a proposal that will increase sales by $10,000 and total fixed costs by $6,000. By what amount will net income increase? A. $6,000 B. $4,000 C. $2,000 D. $0
PROBLEM 6. After its cost structure (variable costs P15 per unit and monthly fixed costs of P125,000),as well as potential market, Babaero Company established what it considered to b a reasonable selling price. The company expected to sell 20,000 units per month and planned its monthly results as follows: Sales @P25 Less: Variable costs @P15 Contribution margin P500,000 [300,000) 200,000 (125,000) 75,000 ( 30,000) P 45,000 Less: Fixed costs Income before taxes Less: Income taxes Net incom 7. If the company wants an after-tax profit of P60,000 on its expected sales volume of 20,000 units, what price must it charge? 8. The company is considering offering its salespeople a 5% commission on sales. What would the total sales, in pesos, have to be in order to implement the commission plan and still earn the planned before-tax income of P75,000? 9. If the company wants its before tax profit higher than the planned P75,000 by P15,000, compute the required increase in peso sales.
The Blue Co. will produce 25,000 units of product next year. Variable costs ratio is 70%, while fixed costs will total P85,000. The price of each unit to be sold by the firm to achieve an EBIT of P60,000 is A P19.33 B P17.33 C P33.33 D P3.33
P Company has provided the following data: Sales Price per unit: $50. Variable Cost per unit: $30; Fixed Cost: $135,000 Expected Sales: 20,000 units. d. Determine the margin of safety in dollars. e. If the company wants to have net income of $70,000, how many units must they sell.
Pursuit Company produces two products: Bric and Brac. The following table summarizes the products' details and planned unit sales for the upcoming period: Bric : Sellingpriceperunit.............$25. Variablecostperunit $14. Planned unit sales volume . . . . . . 800,000 Brac: Sellingpriceperunit............. $30 Variablecostperunit $17. Planned unit sales volume. 400,000 Pursuit Company has total fixed costs of $ 10 million and faces a tax rate of 30% . (a)What is Pursuit Company's expected profit at the planned level of sales? (b)Assuming a constant sales mix, what are the unit sales of Bric and Brac required for Pursuit Company to break even? (c) Assuming a constant sales mix, what are the unit sales of Bric and Brac required for Pursuit Company to earn an after - tax income of $ 910,000?
Company XYZ is currently producing and selling 20,000 units. The selling price per unit is $8 while the variable cost ratio is 20%. Assuming ?total fixed costs of $30,000, what is the margin of safety in ($) value 142,500 a O None of the given answers b O 102,500 .c O 82,500 d O 122,500 e O