1) Department .

A
Charm Flower Oil Total for Dept. A
Ounces 10,000 100,000 110,000
Selling Price 40.00 0.50
Sales 400,000.00 400,000.00
Variable Costs: 260,000.00 260,000.00
Direct materials 160,000.00
Direct Labor 80,000.00
Processing 20,000.00
CM 140,000.00 140,000.00
Fixed Costs 60,000.00 60,000.00
Profit 80,000.00 80,000.00

DEPT A DEPT B
*Variable Cost per Ounce
Direct Materials 160,000.00 Variable Cost in Dept B
Direct Labor 80,000.00 Additional Variable Cost
Additional Variable Cost 20,000.00 Total
Total Variable Cost 260,000.00 Ounces Produced
Divided by total Ounces Produced 10,000.00 Variable Cost per Ounce
Variable Cost per Ounce 26.00

*Total Cost of Dept B

Direct Materials
Direct Labor
Total Variable Cost
Fixed Cost
Total Cost in Dept B

2) Minimum quantity (kgs)

Weighted Contribution Margin Flower Oil Yours Personalli

Ounces 20,000 50,000
Sales Mix 20% 50%
Selling Price 0.50 12.50 1.00
VC/Ounce 0.40 9.50 1.20
CM/unit 0.10 3.00 (0.20)
WCM/unit 0.60 (0.10)
WCM Dept B 0.10 0.50
*Solve for BEP to process or not
Profit not processing further = Profit processing further
x= ounce
Formula= CM*Ounce -Fixed Cost

0.10x-0 = 0.50x-48,000.00 Convert to kgs

48,000.00= 0.50x-0.10x 1 kg: 10 ounces
48,000.00=0.40x 1 kg 120,000 ounces
=
48,000.00/0.40= x 10 ounces kg
120,000 ounces =x
kg=
120,000
=
10
The breakeven point is 12,000 kgs of petals to decide if flower oil should be processed further or not.
Therefore having 12,001 kgs of petals will make flower oil processing further more profitable.

3) Personalli
Processed Not Processed Difference
Sales 50,000.00
Variable Cost 60,000.00 14,000.00 * 14,000 is the fine to be paid if it w
Contribution Margin (10,000.00) (14,000.00)
Fixed Cost
Gross Income (10,000.00) (14,000.00) 4,000.00

I would not let the unprocessed 'Personalli" flow into the river because the net loss is bigger by 4,000.00 compare

4) BEP volume for flower oil processing (ounces of flower oil)

BEP in volume (ounces)= Fixed Cost

Weighted CM, Dep. B
BEP in volume (ounces)= 48,000
0.50
BEP in volume (ounces)= 96,000 ounces

5)
Variable Cost Per Product Yours Personalli Lost Units
Variable Cost in Department B 30,000.00
Additional Variable Cost 160,000.00 60,000.00
Increase in Variable Cost 20,000.00
Total 210,000.00 60,000.00
Ounces Produced 18,000.00 60,000.00 78,000.00
Variable Cost per Ounce 11.67 1.00
 Yours Personalli Lost Units
Revised Contribution Margin if Processed Further
Units 18,000 60,000 (22,000)
Sales Mix 18% 60% 22%
Selling Price per Ounce 15.00 1.00 -
Variable Cost 11.67 1.00 -
Contribution Margin Per Unit 3.33 -
Weighted Contribution Margin 0.60 -

Department B
Yours Personalli Lost Units
Ounces 18,000 60,000 (22,000)
Sales 270,000.00 60,000.00
Variable Cost 210,000.00 60,000.00
Contribution Margin 60,000.00 0.00
Fixed Cost 48,000.00
Profit 12,000.00 - -

DEPT B
Original Profit 2,000.00
Revised Profit 12,000.00
Increase in Profit 10,000.00

I would accept the alternative of increase processing of flower oil in order to obtain a higher price of "Yours" beca
will be much greater than its costs and profit will increase by 10,000.00

6) BEP in sales in Pesos of the company

Charm Yours Personally

Units Sold 10,000 20,000 50,000
Sales in Pesos 400,000 250,000 50,000
Sales mix (based on per unit) 12.50% 25.00% 62.50%
Sales mix (based on peso sales) 57.14% 35.71% 7.14%
Sales Price 40.00 12.50 1.00
Variable Cost 26.00 9.50 1.20
Contribution Margin 14.00 3.00 (0.20)
Weighted Contribution Margin (ounce) 1.75 0.75 (0.13)

BEP in sales in pesos= Fixed Cost BEP in sales in ounces=

CM Ratio
BEP in sales in pesos= 108,000.00 BEP in sales in ounces=
 27.14%
BEP in sales in pesos= 397,936.62 BEP in sales in ounces=

7) At what volume (kgs) of petals per month you would think of suspending CPY's operation for a month?
A. Determine the Avoidable and Unavoidable Costs
Total Fixed Costs Avoidable Unavoidable
Dept A 60,000.00 48,000.00 12,000.00
Percentage 100% 80% 20%
Dept B 48,000.00 28,800.00 19,200.00
Percentage 100% 60% 40%
Total 108,000.00 76,800.00 31,200.00

Avoidable Fixed Cost

Suspension of operation point( in ounces) =
Weighted CM/ Unit
= 76,800.00
2.38
32,269
Suspension of operation point( in ounces) =

Allocate the amount in ounces (32,269 * sales mix ( ounces) )

Charm= 12.50%
Yours= 25.00%
Personalli= 62.50%
Total Charm Yours
32,269.00 4,034 8,067
Ratio (divide)
Charm 110,000 ounces:10,000 ounces 11.00
Yours 110,000 ounces : 20,000 ounces 5.50
Personally 110,000 ounces : 50,000 ounces
Grossed up in Ounces input 44,370 44,370
Convesion factor: 1 kg input is to 11 ounces of output divide by 11 ounces
Requirement in Kilos 4,034 4,034
The Requirement in Kilos is: 4,034 kgs

8) Equipment Present Proposed Total

Depreciation 10,000.00 20,000.00 (10,000.00)
Less:Tax of Depreciation 35% 3,500.00
Variable Cost 240,000.00 210,000.00 30,000.00
Less:Reduction of VC 35% 10,500.00
Company’s Net Gain 13,000.00

By going for the new equipment, the company will have a net gain of P13,000
 Department B
Yours Personalli Total for Dept. B Total Percentage
20,000 50,000 70,000 180,000
12.50 1.00
250,000.00 50,000.00 300,000.00 700,000.00 100%
190,000.00 60,000.00 250,000.00 510,000.00 72.86%
5,000.00
25,000.00
160,000.00 60,000.00
60,000.00 (10,000.00) 50,000.00 190,000.00 27.14%
48,000.00 48,000.00 108,000.00
12,000.00 (10,000.00) 2,000.00 82,000.00

30,000.00
160,000.00 60,000.00
190,000.00 60,000.00
20,000.00 50,000.00
9.50 1.20

ost of Dept B
5,000.00
25,000.00
30,000.00
48,000.00
78,000.00

Lost Units Total

70,000 100,000
70% 100%

0.50
 12,000 kgs

urther or not.

is the fine to be paid if it will be flowed into the river

gger by 4,000.00 compared to processing it further.

 Total

100,000
100%

0.60

Total Dep. B
100,000

60,000.00
48,000.00
12,000.00

gher price of "Yours" because Sales

Total
80,000.00
700,000.00
100%
100%
8.75

2.38 27.14%

Fixed Cost
CM/ounce
108,000.00
 2.38
45,378.15

tion for a month?

Personalli
20,168

2.20
44,370

4,034