If the variable cost is P15/unit, fixed cost is 265,000; and Sales is P55. Find the BEPs, and BEPx. Use the Target Profit Analysis Equation Method. Compute for the following: • Contribution Margin Ratio • Break-Even Point in Sales • Break-Even Point in Units IMPORTANT NOTE: PLEASE REFER TO THE GIVEN LESSON. USE THE FORMULA FROM THE LESSON IN THE PHOTE ATTACHED. THANK YOU. I will give you upvote for this.
If the variable cost is P15/unit, fixed cost is 265,000; and Sales is P55. Find the BEPs, and BEPx. Use the Target Profit Analysis Equation Method. Compute for the following: • Contribution Margin Ratio • Break-Even Point in Sales • Break-Even Point in Units IMPORTANT NOTE: PLEASE REFER TO THE GIVEN LESSON. USE THE FORMULA FROM THE LESSON IN THE PHOTE ATTACHED. THANK YOU. I will give you upvote for this.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
If the variable cost is P15/unit, fixed cost is 265,000; and Sales is P55. Find the BEPs, and BEPx. Use the Target Profit Analysis Equation Method.
Compute for the following:
• Contribution Margin Ratio
• Break-Even Point in Sales
• Break-Even Point in Units
IMPORTANT NOTE:
PLEASE REFER TO THE GIVEN LESSON. USE THE FORMULA FROM THE LESSON IN THE PHOTE ATTACHED. THANK YOU. I will give you upvote for this.
Transcribed Image Text:Target Profit Analysis Equation Model
The same method - used to determine the sales volume needed to achieve a target
profit.
For example Company C wants to know how many product A must be sold to earn
P10,000 a day?
Note: On this analysis Profits in BEV is equal to the target
Example 1: P32Q = P16Q + P80,000 + P10,000
= P32Q - P16Q = P80,000 + P10,000
= 16Q = P80,000 + P10,000
Q = 90,000/16 = 5,625 (BEPx)
Example 2:
If the Variable per unit is P20, fixed cost is P120,000. Sales is P50. The price is P50. Find
the BEPs and BEPx.
In the formula: Sales - Variable Cost - Fixed Cost = Income/Profit
= P50Q - P20Q - P120,000 = 0
= P50Q - P20Q = P120,000
= P30Q = P120,000
Q= 120,000/30 = 4,000 (BEPx)
BEPS = P4,000 (50) = P200,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education