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04 Activity 1 Managerial

The document provides information about a new product being introduced by XYZ Company in August. It includes the selling price per unit, variable costs per unit, and monthly fixed costs. The solutions calculate: 1) The break-even point is 12,000 units or P432,000 pesos. 2) The margin of safety is 3,000 units or P108,000 pesos. 3) To earn a profit of P12,000, desired sales are 14,000 units or P504,000 pesos.

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Ralph Louise Ponciano
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170 views3 pages

04 Activity 1 Managerial

The document provides information about a new product being introduced by XYZ Company in August. It includes the selling price per unit, variable costs per unit, and monthly fixed costs. The solutions calculate: 1) The break-even point is 12,000 units or P432,000 pesos. 2) The margin of safety is 3,000 units or P108,000 pesos. 3) To earn a profit of P12,000, desired sales are 14,000 units or P504,000 pesos.

Uploaded by

Ralph Louise Ponciano
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BM1915

NAME: PONCIANO, RALPH LOUISE GERON SCORE:

ACTIVITY

XYZ Company plans to introduce a new product in August. Information on selling price and related
costs for the new product is shown below:

Selling price per unit P36.00


Variable cost per unit:
Direct materials 15.00
Direct labor 9.00
Manufacturing overhead 4.00
Sales commission 2.00
Monthly fixed costs:
Manufacturing overhead P40,000
Administrative cost 32,000
Actual units produced 15,000

Required:
a. Break-even point in units
b. Break-even point in pesos
c. Margin of safety in units
d. Margin of safety in pesos
e. Desired sales in units to earn a profit of P12,000
f. Desired sales in pesos to earn a profit of P12,000
SOLUTIONS:

a. Break-even point in units

BEP in units= Total Fixed Costs

                           CM per unit

                   = 72,000
                          6
                   = P12,000 units

b. Break-even point in pesos

BEP in pesos= Total Fixed Costs

                              CM ratio

                      = 72,000
                         16.67%
                      = P432,000.00

c. Margin of safety in units

MS in units= Sales in units – BEP in units

                  = P15,000 – P12,000

                  = P3,000 units

d. Margin of safety in pesos

MS in pesos= Sales in pesos – BEP in pesos

                    = P540,000 – P432,000.00

                    = P108,000.00

e. Desired sales in units to earn a profit of P12,000

Desired sales in units= Total Fixed Costs + Target Profit

                                                  CM per unit

                                 = P72,000 + P12,000


                                                  6
                                 = 84,000

                                        6

                                 = P14,000

a. Desired sales in pesos to earn a profit of P12,000


Desired sales in pesos= Total Fixed Costs + Target Profit

                                                        CM ratio

                                     = P72,000 + P12,000


                                                    16.67%
                                     = 84,000

                                         16.67%

                                     = P504,000.00

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