Two different product lines are manufactured and sold by Cheche Manufacturing Corp. Monthly fixed cost amounted to P90,000. Data with respect to each product lines follows: Product Cutie P 10.00 5.00 Product Sweetie P 8.00 2.00 Selling price per unit Variable cost per unit Original sales mix Required: a. Based on the original sales mix: 1. What is the weighted contribution margin per unit? 2. What is the combined units to break-even? 60% 40% 3. How many units each product line to be sold in order to break- even? Show proofs. b. Suppose the mix is 50-50 for each product line: 1. What is the weighted contribution margin percentage? 2. What is the combined amount of sales of the two products needed to earn P60,000 per month? 3. How much sales should each product line generated in order for Cheche to earn P60,000 per month? c. Based on the above data (letter b), what is the margin of safety in units, in peso and in percentage? d. Assuming the total combined sales of the two products amounted to P600,000, prepare a contribution format income statement for the month based on original sales mix.
Two different product lines are manufactured and sold by Cheche Manufacturing Corp. Monthly fixed cost amounted to P90,000. Data with respect to each product lines follows: Product Cutie P 10.00 5.00 Product Sweetie P 8.00 2.00 Selling price per unit Variable cost per unit Original sales mix Required: a. Based on the original sales mix: 1. What is the weighted contribution margin per unit? 2. What is the combined units to break-even? 60% 40% 3. How many units each product line to be sold in order to break- even? Show proofs. b. Suppose the mix is 50-50 for each product line: 1. What is the weighted contribution margin percentage? 2. What is the combined amount of sales of the two products needed to earn P60,000 per month? 3. How much sales should each product line generated in order for Cheche to earn P60,000 per month? c. Based on the above data (letter b), what is the margin of safety in units, in peso and in percentage? d. Assuming the total combined sales of the two products amounted to P600,000, prepare a contribution format income statement for the month based on original sales mix.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Answer letter c and d only
Transcribed Image Text:Two different product lines are manufactured and sold by Cheche
Manufacturing Corp. Monthly fixed cost amounted to P90,000. Data
with respect to each product lines follows:
Product Cutie
P 10.00
5.00
Product Sweetie
P 8.00
2.00
Selling price per unit
Variable cost per unit
Original sales mix
Required:
a. Based on the original sales mix:
1. What is the weighted contribution margin per unit?
2. What is the combined units to break-even?
60%
40%
3. How many units each product line to be sold in order to break-
even? Show proofs.
b. Suppose the mix is 50-50 for each product line:
1. What is the weighted contribution margin percentage?
2. What is the combined amount of sales of the two products needed
to earn P60,000 per month?
3. How much sales should each product line generated in order for
Cheche to earn P60,000 per month?
c. Based on the above data (letter b), what is the margin of safety in
units, in peso and in percentage?
d. Assuming the total combined sales of the two products amounted to
P600,000, prepare a contribution format income statement for the
month based on original sales mix.
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