PROBLEMS Problem 1 Candace Company's projected profit for the coming year is as follows: Sales Variable cost Contribution margin Fixed cost Operating income TOTAL P 600,000 360,000 240,000 192,000 P 48.000 PER UNIT P 60.00 36.00 P 24.00 Required 1.Compute the variable cost ratio 2.Compute the contribution ratio 3.Compute the break- even point in units 4.Compute the break - even sales in pesos Problem 2 Monet Company plans to sell 10,000 motorcycle helmets at P1,000 each in the coming year. Variable cost is P 700 which includes direct materials, direct labor, variable factory overhead, variable selling. and variable administrative. Total fixed cost equals P148,500 which includes fixed factory overhead, and fixed administrative expenses. Required 1.Compute the break-even point in number of helmets 2.Compute for the break-even sales 3.Check your answer by preparing a contribution margin statement based on the break-even sales Problem 3 Reno sell a product for P1,050 with variable cost of P630. Total fixed cost amounted to P630,000. 1.Compute for contribution margin per unit 2.Compute for contribution margin ratio 3.Compute for the break-even point in units and in pesos 4.1f Reno wants to earn P94,500, how many units must the company sell?
PROBLEMS Problem 1 Candace Company's projected profit for the coming year is as follows: Sales Variable cost Contribution margin Fixed cost Operating income TOTAL P 600,000 360,000 240,000 192,000 P 48.000 PER UNIT P 60.00 36.00 P 24.00 Required 1.Compute the variable cost ratio 2.Compute the contribution ratio 3.Compute the break- even point in units 4.Compute the break - even sales in pesos Problem 2 Monet Company plans to sell 10,000 motorcycle helmets at P1,000 each in the coming year. Variable cost is P 700 which includes direct materials, direct labor, variable factory overhead, variable selling. and variable administrative. Total fixed cost equals P148,500 which includes fixed factory overhead, and fixed administrative expenses. Required 1.Compute the break-even point in number of helmets 2.Compute for the break-even sales 3.Check your answer by preparing a contribution margin statement based on the break-even sales Problem 3 Reno sell a product for P1,050 with variable cost of P630. Total fixed cost amounted to P630,000. 1.Compute for contribution margin per unit 2.Compute for contribution margin ratio 3.Compute for the break-even point in units and in pesos 4.1f Reno wants to earn P94,500, how many units must the company sell?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Chapter 4 Cost Volume Profit Analysis
105
PROBLEMS
Problem 1
Candace Company's projected profit for the coming year is as follows:
Sales
Variable cost
Contribution margin
Fixed cost
Operating income
TOTAL
P 600,000
360.000
240,000
192,000
P 48.000
PER UNIT
P 60.00
36.00
P 24.00
Required
1.Compute the variable cost ratio
2.Compute the contribution ratio
3.Compute the break- even point in units
4.Compute the break - even sales in pesos
Problem 2
Monet Company plans to sell 10,000 motoreycle helmets at P1,000 each in the
coming year. Variable cost is P 700 which includes direct materials, direct labor,
variable factory overhead, variable selling, and variable administrative. Total
fixed cost equals P148,500 which includes fixed factory overhead, and fixed
administrative expenses.
Required
1.Compute the break-even point in number of helmets
2.Compute for the break-even sales
3.Check your answer by preparing a contribution margin statement based on the
break-even sales
Problem 3
Reno sell a product for PI,050 with variable cost of P630. Total fixed cost
amounted to P630,000.
1.Compute for contribution margin per unit
2.Compute for contribution margin ratio
3.Compute for the break-even point in units and in pesos
4.1f Reno wants to earn P94,500, how many units must the company sell?
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