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Cost-Volume-Profit Analysis - Sample Problems

The document provides information about the cost-volume-profit analysis of two companies, Genevieve Co. and Odessa Co., and Basic Illustration Corp. It details their fixed costs, contribution margin ratios, selling prices, units sold, break-even points in units and pesos, margin of safety, and the effects of changes in fixed costs and variable costs on break-even points.

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Viviene Seth Alvarez Ligon
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450 views1 page

Cost-Volume-Profit Analysis - Sample Problems

The document provides information about the cost-volume-profit analysis of two companies, Genevieve Co. and Odessa Co., and Basic Illustration Corp. It details their fixed costs, contribution margin ratios, selling prices, units sold, break-even points in units and pesos, margin of safety, and the effects of changes in fixed costs and variable costs on break-even points.

Uploaded by

Viviene Seth Alvarez Ligon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Cost Volume Analysis

ITEMS 1 TO 4 ARE BASED ON THE FOLLOWING:


Genevieve Co. and Odessa Co. Sell the same product in a competitive industry. Thus, the selling price of the product for
each company is the same. Other data about the two companies are as follows:
Genevieve Co. Odessa Co.
Fixed costs P50,000 P70,000
Contribution margin ratio 40%. 50%
Sales price per unit P1,000 P800
Units sold for the period 200 350

1. The companies’ break-even points in units are


2. The companies’ break-even points in peso are
3. True or False: At BEP, contribution margin is equal to fixed cost.
4. True or False: At BEP, there is a profit but there is no loss.

ITEMS 5 TO 12 ARE BASED ON THE FOLLOWING:


Basic Illustration Corp produces and sells a single product. The selling price is P25 and the variable costs is P15 per unit.
The corporations fixed costs is P100,000 per month. Average monthly sales is 11,000 units.
5. The corporation’s contribution margin per unit and as a percent of sales (CMR) is
6. The corporation’s break-even point in peso and in units
7. If the corporation desires to earn profit of P20,000 before tax it must generate sales of (in peso and in units)
8. If the corporation pays corporate income tax at the rate of 30% and it desires to earn after tax profit of P21,000 it
must generate sales of (in peso and in units)
9. With an average monthly sale of 11,000 units, the corporation’s margin of safety in peso is
10. The margin of safety ratio (MSR) and the break even sales ratio (BESR) are
11. If the fixed costs will increase by P20,000 the break-even point in units will increase (decrease) by
12. If variable cost per unit will go up by P5, the peso break even sales will increase (decrease) to

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