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Hetutua, Therese Janine D. Oct. 3, 2020 Bsac 2B: Problem 1

This document contains 4 problems related to break even analysis. Problem 1 requires calculating the break even point in units and operating income with a 25% sales increase and increased fixed overhead. Problem 2 requires graphing break even points and margin of safety for a company. Problem 3 requires calculating budgeted sales volume and margin of safety in pesos and percentage. Problem 4 requires calculating weighted average contribution margin and break even point in units, and contribution margin ratio.

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Tristan Arthur Bernales
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740 views7 pages

Hetutua, Therese Janine D. Oct. 3, 2020 Bsac 2B: Problem 1

This document contains 4 problems related to break even analysis. Problem 1 requires calculating the break even point in units and operating income with a 25% sales increase and increased fixed overhead. Problem 2 requires graphing break even points and margin of safety for a company. Problem 3 requires calculating budgeted sales volume and margin of safety in pesos and percentage. Problem 4 requires calculating weighted average contribution margin and break even point in units, and contribution margin ratio.

Uploaded by

Tristan Arthur Bernales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Hetutua, Therese Janine D. Oct.

3, 2020

BSAC 2B Activity 1

Problem 1.

Ilustrative Problem 13.2. Breake even analyis

the income statement for one of manhattan company's product shows:

Sales (100 units at P100 a unit) P 10,000


Cost of good sold
Direct labor P1,500
Direct materials used 1,400
variable factory overhead 1,000
fixed factory overhead 500
4,400
Gross profit P 5,600
Marketing expenses
Variable P 600
Fixed 1,000
Administrative expenses:
Variable 500
fixed 1,000.00 3,100
Operating income P2,500

Required:
1. Compute the break even point in units
2. If sales increase by 25% how much will be the new operating income?
3. Compute the new break even point in pesos if fixed factory overhead will increase by P 1,700

Problem 2

The Maling Company has the following income statement when 10, 000 units were sold:

MALING COMPANY
Income statement

Sales……………………………………………………………………………. P 20,000
Expenses:
Variable expenses…………………...........P 12,000
Fixed expenses……………………………….. 6,000 18,000
Net income…………………………………………………………………..P 2,000
10,000 units were sold

Required
(a) Prepare a break-even graph for the company.
(b) From the graph, how many units must be sold to break-even?
(c) What is the margin of safety in units?

Problem 3
Amflor manufacturing Company’s budget for the coming year revealed the following unit data:

Budgeted net income for the year…………………………………………………….P 875,000


Unit costs:
Variable Fixed
Manufacturing cost P14.00 P12.00
Selling cost 2.50 5.50
General cost 0.25 7.00
Unit selling cost ……………………………………………………………………………….. P 50

Required:
1. Determine the budgeted sales volume in units
2. Determine the margin of safety in peso amount and percentage

Problem 4

A company sells two products, product 1 and product 2. Three units of product 1 are sold for every two
units of product 2. Fixed costs is P234, 000 per year

Product 1 is sold for P20 per unit and the variable costs identified with the production and sale of each
unit of the product amounts to P14, Product 2 is old for P24 per unit, and the variable costs identified
with the production and sale of each unit of the product amounts to P20.

1. What is the weighted-average unit contribution margin


2. What is the break even points in units
3. What is the weighted average contribution in ratio?
ANSWERS/SOLUTIONS:

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