CVP Analysis Exercises

Introduction
Total Per Unit Percentage
Sales (400 speakers) ₱ 100,000.00 ₱ 250.00
Variable Expenses ₱ 60,000.00 ₱ 150.00 60% VE Ratio
Contribution Margin ₱ 40,000.00 ₱ 100.00 40% CM Ratio
Fixed Expenses ₱ 35,000.00
Net Operating Income ₱ 5,000.00

Break Even Point 350 Speakers

₱ 87,500.00 Dollars

Application of CVP Concepts

Fixed Cost & Sales Vol. Total Per Unit Add. Adv. Budg. Difference
Sales (400 speakers) ₱ 100,000.00 ₱ 250.00 ₱ 130,000.00 ₱ 30,000.00
Variable Expenses ₱ 60,000.00 ₱ 150.00 ₱ 78,000.00 ₱ 18,000.00
Contribution Margin ₱ 40,000.00 ₱ 100.00 ₱ 52,000.00 ₱ 12,000.00
Fixed Expenses ₱ 35,000.00 ₱ 45,000.00 ₱ 10,000.00
Net Operating Income ₱ 5,000.00 ₱ 2,000.00
Decision: YES

Var Cost & Sales Vol. Total Per Unit New per Unit New Difference
Sales (400 speakers) ₱ 100,000.00 ₱ 250.00 ₱ 250.00 ₱ 120,000.00 ₱ 20,000.00
Variable Expenses ₱ 60,000.00 ₱ 150.00 ₱ 160.00 ₱ 76,800.00 ₱ 16,800.00
Contribution Margin ₱ 40,000.00 ₱ 100.00 ₱ 90.00 ₱ 43,200.00 ₱ 3,200.00
Fixed Expenses ₱ 35,000.00 ₱ 35,000.00 ₱ -
Net Operating Income ₱ 5,000.00 ₱ 8,200.00 ₱ 3,200.00
Decision: YES

Fxd Cost, SP, & Sale Vol Total Per Unit New per Unit New Difference
Sales (400 speakers) ₱ 100,000.00 ₱ 250.00 ₱ 230.00 ₱ 138,000.00 ₱ 38,000.00
Variable Expenses ₱ 60,000.00 ₱ 150.00 ₱ 150.00 ₱ 90,000.00 ₱ 30,000.00
Contribution Margin ₱ 40,000.00 ₱ 100.00 ₱ 80.00 ₱ 48,000.00 ₱ 8,000.00
Fixed Expenses ₱ 35,000.00 ₱ 50,000.00 ₱ 15,000.00
Net Operating Income ₱ 5,000.00 -₱ 2,000.00 -₱ 7,000.00
Decision: NO

Var Cost, Fxd Cost, & Sale Vol Total Per Unit New per Unit New Difference
Sales (400 speakers) ₱ 100,000.00 ₱ 250.00 ₱ 230.00 ₱ 138,000.00 ₱ 38,000.00
Variable Expenses ₱ 60,000.00 ₱ 150.00 ₱ 150.00 ₱ 90,000.00 ₱ 30,000.00
Contribution Margin ₱ 40,000.00 ₱ 100.00 ₱ 80.00 ₱ 48,000.00 ₱ 8,000.00
Fixed Expenses ₱ 35,000.00 ₱ 50,000.00 ₱ 15,000.00
Net Operating Income ₱ 5,000.00 -₱ 2,000.00 -₱ 7,000.00
Decision: NO

Selling Price Total Per Unit

Sales (400 speakers) ₱ 100,000.00 ₱ 170.00 Desired Quoted Price
Variable Expenses ₱ 60,000.00 ₱ 150.00
Contribution Margin ₱ 40,000.00 ₱ 20.00
Fixed Expenses
Net Operating Income ₱ 3,000.00

Target Profit Analysis

Target Profit ₱ 40,000.00

CM/Unit ₱ 100.00
CM Ratio 40%
Fixed Exp ₱ 35,000.00
 Quantity 750
Dollar Sales ₱ 187,500.00

Margin of Safety
₱ 400.00
STANDARD Total Per Unit Percentage
Sales (400 speakers) ₱ 100,000.00 ₱ 250.00
Variable Expenses ₱ 60,000.00 ₱ 150.00 60% VE Ratio
Contribution Margin ₱ 40,000.00 ₱ 100.00 40% CM Ratio
Fixed Expenses ₱ 35,000.00
Net Operating Income ₱ 5,000.00

Break Even Point 350 Speakers

₱ 87,500.00 Dollars

Sales ₱ 100,000.00
Break Even ₱ 87,500.00
Margin of Safety ₱ 12,500.00 Excess of sales over break-even
Margin of Safety 12.5% Portion of sales above break-even
40% NOI /MOS
Higher margin of safety, the better

Operating Leverage

₱ 400.00
STANDARD Total Per Unit Percentage
Sales (400 speakers) ₱ 100,000.00 ₱ 250.00
Variable Expenses ₱ 60,000.00 ₱ 150.00 60% VE Ratio
Contribution Margin ₱ 40,000.00 ₱ 100.00 40% CM Ratio
Fixed Expenses ₱ 35,000.00
Net Operating Income ₱ 5,000.00

DOL ₱ 8.00
Every 1% of revenue increase, profits increase by 8% because of the degree of operating leverage

Mixed Costs: High-Low Method

Month Activity Level Maintenance Occurred X Y

January ₱ 5,600.00 ₱ 79,000.00 June ₱ 8,000.00 ₱ 9,800.00
February ₱ 7,100.00 ₱ 8,500.00 March ₱ 5,000.00 ₱ 7,400.00
March ₱ 5,000.00 ₱ 7,400.00 Difference ₱ 3,000.00 ₱ 2,400.00
April ₱ 6,500.00 ₱ 8,200.00 b ₱ 0.80
May ₱ 7,300.00 ₱ 9,100.00 a -₱ 3,400.00
June ₱ 8,000.00 ₱ 9,800.00 Y = 3400 + .8X
July ₱ 6,200.00 ₱ 7,800.00

Slides Illustrative Example

Selling Price ₱ 24.00

Variable Cost ₱ 18.00
CM ₱ 6.00
Fixed Costs ₱ 24,000.00
Average ₱ 5,000.00

5000 Total Per Unit

Revenue ₱ 120,000.00 ₱ 24.00
Variable Cost ₱ 90,000.00 ₱ 18.00
CM ₱ 30,000.00 ₱ 6.00
Fixed Costs ₱ 24,000.00
 Net Operating Inc ₱ 6,000.00

Break Even 4000 Units

₱ 96,000.00 Dollars
Margin of Safety 1000 Units
₱ 24,000.00 Dollars

Quick Check
Demand ₱ 2,100.00
SP ₱ 1.49
VC ₱ 0.36
CM ₱ 1.13
FC ₱ 1,300.00

₱ 2,100.00 Total Per Unit

Revenue ₱ 3,129.00 ₱ 1.49
Variable Exp ₱ 756.00 ₱ 0.36
CM ₱ 2,373.00 ₱ 1.13
Fixed Exp ₱ 1,300.00
Net Op Inc. ₱ 1,073.00
DOL ₱ 2.21
Answer A

Table
A B
SP ₱ 300.00 ₱ 300.00
VC ₱ 120.00 ₱ 220.00
CM ₱ 180.00 ₱ 80.00
FX ₱ 250,000.00 ₱ 100,000.00

300 A B
Revenue ₱ 90,000.00 ₱ 90,000.00
Variable Exp ₱ 36,000.00 ₱ 66,000.00
CM ₱ 54,000.00 ₱ 24,000.00
Fixed Exp ₱ 250,000.00 ₱ 100,000.00
Net Op Inc. -₱ 196,000.00 -₱ 76,000.00
DOL -₱ 0.28 -₱ 0.32
BE P 1389 1250

Handling Mixed Costs Slide

Month Hours Total Maintenance

Jan 625 ₱ 7,950.00
Feb 450 ₱ 7,400.00
Mar 700 ₱ 8,275.00
Apr 550 ₱ 7,625.00
May 775 ₱ 9,100.00
June 850 ₱ 9,800.00

X Y
June 850 ₱ 9,800.00
Feb 450 ₱ 7,400.00
Difference ₱ 400.00 ₱ 2,400.00
b ₱ 6.00
a ₱ 4,700.00
Y = 4700 + 6X

Concept Check
 A 120000 ₱ 14,000.00
B 80000 ₱ 10,000.00
Difference ₱ 40,000.00 ₱ 4,000.00
b ₱ 0.10
a ₱ 2,000.00
Y = 2,000 + .1X

E5-12
High Dynamic Sure Shot Total
Sales ₱ 150,000.00 ₱ 250,000.00 ₱400,000.00
CM Ratio 80% 36% 53%
Fixed Exp ₱ 183,750.00

Total High Dynamic Sure Shot

Revenue ₱ 400,000.00 ₱ 150,000.00 ₱250,000.00 ₱ 0.63 ₱ 312,500.00
Variable Cost ₱ 190,000.00 ₱ 30,000.00 ₱160,000.00 ₱ 0.38 ₱ 187,500.00
Contribution Margin ₱ 210,000.00 ₱ 120,000.00 ₱ 90,000.00
Common Exp ₱ 183,750.00 ₱ 312,500.00
Net Operating Inc ₱ 26,250.00 ₱ 187,500.00
Break Even Point ₱ 350,000.00 ₱ 1.00
DOL 8
Inc 25%
Profit Inc 200%

E5-14
SP ₱ 40.00
CM ₱ 0.30
Fxd Exp ₱ 180,000.00
Demand ₱ 16,000.00

₱ 16,000.00 Total Per Unit

Revenue ₱ 640,000.00 ₱ 40.00
Variable Cost ₱ 448,000.00 ₱ 28.00
CM ₱ 192,000.00 ₱ 12.00
Fixed Expenses ₱ 180,000.00
Net Operating Inc ₱ 12,000.00

₱ 28.00 1. Variable Exp/Unit

₱ 15,000.00 2. Break Even Point (Unit)
₱ 600,000.00 3. Break Even Point (Sales)
₱ 800,000.00 4. Dollar Amt to achieved 60,000
₱ 11,250.00 5. New Break Even Point (Units)
₱ 450,000.00 6. New Break Even Point (Sales)
₱ 600,000.00 6. Dollar Sales required for 60,000

SP ₱ 40.00
CM ₱ 0.30
Fxd Exp ₱ 180,000.00
Demand ₱ 16,000.00

₱ 11,250.00 Total Per Unit Percentage

Revenue ₱ 640,000.00 ₱ 40.00
Variable Cost ₱ 384,000.00 ₱ 24.00 ₱ 0.60
CM ₱ 256,000.00 ₱ 16.00 ₱ 0.40
Fixed Expenses ₱ 180,000.00
Net Operating Inc ₱ 76,000.00

E5-17
SP ₱ 50.00
 VC ₱ 32.00 ₱ 0.64
CM ₱ 18.00 ₱ 0.36
Fix Exp ₱ 108,000.00

₱ 6,000.00 1. Break Even Point (Unit)

₱ 300,000.00 2. Break Even Point (Sales)
Up 3. Essay
4. Contribution Format Income Statement (1 and 2)

SP ₱ 50.00 ₱ 45.00
VC ₱ 32.00 ₱ 0.64 ₱ 32.00 ₱ 0.71
CM ₱ 18.00 ₱ 0.36 ₱ 13.00 ₱ 0.29
Fix Exp ₱ 108,000.00
Demand ₱ 8,000.00

₱ 8,000.00 Total Per Unit

Revenue ₱ 400,000.00 ₱ 50.00
Variable Cost ₱ 256,000.00 ₱ 32.00
CM ₱ 144,000.00 ₱ 18.00
Fixed Exp ₱ 108,000.00
Net Op. Inc ₱ 36,000.00

₱ 10,000.00 Total Per Unit

Revenue ₱ 450,000.00 ₱ 45.00
Variable Cost ₱ 320,000.00 ₱ 32.00
CM ₱ 130,000.00 ₱ 13.00
Fixed Exp ₱ 108,000.00
Net Op. Inc ₱ 22,000.00

₱ 495,000.00 5. New cond, target profit 35,000

₱ 11,000.00

E5-21
Budgeted Total White Fragrant Loonzain
Sales ₱ 750,000.00 ₱ 150,000.00 ₱390,000.00 ₱ 210,000.00
Variable Expenses ₱ 270,000.00 ₱ 108,000.00 ₱ 78,000.00 ₱ 84,000.00
Contribution Margin ₱ 480,000.00 ₱ 42,000.00 ₱312,000.00 ₱ 126,000.00
Fixed Expenses ₱ 449,280.00
Net Operating Inc. ₱ 30,720.00
Break Even (Dollars) ₱ 702,000.00

Budgeted Total White Fragrant Loonzain

Sales ₱ 750,000.00 ₱ 300,000.00 ₱180,000.00 ₱ 270,000.00
Variable Expenses ₱ 360,000.00 ₱ 216,000.00 ₱ 36,000.00 ₱ 108,000.00
Contribution Margin ₱ 390,000.00 ₱ 84,000.00 ₱144,000.00 ₱ 162,000.00
Fixed Expenses ₱ 449,280.00
Net Operating Inc. -₱ 59,280.00
Break Even (Dollars) ₱ 864,000.00

E5-23
SP ₱ 20.00
VC ₱ 8.00
FX ₱ 180,000.00

Sales ₱ 400,000.00
VC ₱ 160,000.00 40%
CM ₱ 240,000.00 60%
FE ₱ 180,000.00
 NOI ₱ 60,000.00
BEP ₱ 300,000.00
DOL ₱ 4.00
% inc in sales 19%
% inc in profit 75%

60% 1. CM Ratio
₱ 300,000.00 2. BEP
75% 3. Inc in profit
₱ 4.00 4. DOL
80% 5. % inc in profit, 20% inc in sales
Yes 6. Recommendation

SP ₱ 18.00 FX ₱ 180,000.00
VC ₱ 8.00
CM ₱ 10.00
Units 20000 25000

Sales ₱ 450,000.00
VC ₱ 160,000.00 36%
CM ₱ 290,000.00 64%
FE ₱ 210,000.00
NOI ₱ 80,000.00
BEP ₱ 325,862.07
DOL ₱ 3.63
% inc in sales 17%
% inc in profit 60%

idk how 7. Increase in stuff

E5A-3
Usage ₱ 105,000.00 ₱ 70,000.00
Cost/Km ₱ 11.40 ₱ 13.40
Total Cost ₱ 1,197,000.00 ₱ 938,000.00

X Y
High ₱ 105,000.00 ₱ 1,197,000.00
Low ₱ 70,000.00 ₱ 938,000.00
Difference ₱ 35,000.00 ₱ 259,000.00
b ₱ 7.40
a ₱ 420,000.00
Y = 420000 + 7.4X

Y = 420000 + 7.4X 1. VOC/KM and Fixed Cost

Y = 420000 + 7.4X 2. Express in equation form
₱ 1,012,000.00 3. 80,000 kilometers

E5A-7
July August September Classification
Sales in Units ₱ 4,000.00 ₱ 4,500.00 ₱ 5,000.00

Sales ₱ 400,000.00 ₱ 450,000.00 ₱500,000.00

COGS ₱ 240,000.00 ₱ 270,000.00 ₱300,000.00 ₱ 0.60 ₱ 0.60 ₱ 0.60
Gross Margin ₱ 160,000.00 ₱ 180,000.00 ₱200,000.00
S & A Exp
Adv Exp ₱ 21,000.00 ₱ 21,000.00 ₱ 21,000.00 ₱ 0.05 ₱ 0.05 ₱ 0.04
Ship Exp ₱ 34,000.00 ₱ 36,000.00 ₱ 38,000.00 ₱ 0.09 ₱ 0.08 ₱ 0.08
S&C ₱ 78,000.00 ₱ 84,000.00 ₱ 90,000.00 ₱ 0.20 ₱ 0.19 ₱ 0.18
Ins Exp ₱ 6,000.00 ₱ 6,000.00 ₱ 6,000.00 ₱ 0.02 ₱ 0.01 ₱ 0.01
 Dep Exp ₱ 15,000.00 ₱ 15,000.00 ₱ 15,000.00 ₱ 0.04 ₱ 0.03 ₱ 0.03
Total S&A Exp ₱ 154,000.00 ₱ 162,000.00 ₱170,000.00 ₱ 0.39 ₱ 0.36 ₱ 0.34
NOI ₱ 6,000.00 ₱ 18,000.00 ₱ 30,000.00

Shipping Expense Usage Cost

Low ₱ 4,000.00 ₱ 34,000.00 Revenues ₱ 500,000.00
₱ 4,500.00 ₱ 36,000.00 Variable Exp
High ₱ 5,000.00 ₱ 38,000.00 COGS ₱ 300,000.00
Difference ₱ 1,000.00 ₱ 4,000.00 Shipping Exp ₱ 20,000.00
b. ₱ 4.00 S& C ₱ 60,000.00
a. ₱ 18,000.00 Total Variable Exp ₱ 380,000.00
Y = 18000 + 4X Contribution Margin ₱ 120,000.00
Fixed Expenses
S&C Usage Cost Adv Exp ₱ 21,000.00
Low ₱ 4,000.00 ₱ 78,000.00 Ship Exp ₱ 18,000.00
₱ 4,500.00 ₱ 84,000.00 S & C ₱ 30,000.00
High ₱ 5,000.00 ₱ 90,000.00 Ins Exp ₱ 6,000.00
Difference ₱ 1,000.00 ₱ 12,000.00 Dep Exp ₱ 15,000.00
b. ₱ 12.00 Total Fixed Expenses ₱ 90,000.00
a. ₱ 30,000.00 Net Operating Income ₱ 30,000.00
Y = 30000 + 12X

Total S&A Exp Usage Cost

Low ₱ 4,000.00 ₱ 154,000.00
₱ 4,500.00 ₱ 162,000.00
High ₱ 5,000.00 ₱ 170,000.00
Difference ₱ 1,000.00 ₱ 16,000.00
b. ₱ 16.00
a. ₱ 90,000.00
Y = 90000+16X

E5A-8
Month Machine-Hours TOC
April ₱ 70,000.00 ₱ 198,000.00
May ₱ 60,000.00 ₱ 174,000.00 Low
June ₱ 80,000.00 ₱ 222,000.00
July ₱ 90,000.00 ₱ 246,000.00 High

July 90000 ₱ 246,000.00

May 60000 ₱ 174,000.00
Difference ₱ 30,000.00 ₱ 72,000.00
b ₱ 2.40
a ₱ 30,000.00
Y = 30000 + 2.4X

Variable ₱ 48,000.00 ₱ 0.28 ₱ 0.80

Fixed ₱ 21,000.00 ₱ 21,000.00 ₱ 2.40
Mix ₱ 105,000.00
Total ₱ 174,000.00
Variable Fixed Mixed
April ₱ 70,000.00 ₱ 198,000.00 ₱ 56,000.00 ₱ 21,000.00 ₱ 121,000.00 ₱ 198,000.00
May ₱ 60,000.00 ₱ 174,000.00 ₱ 48,000.00 ₱ 21,000.00 ₱ 105,000.00 ₱ 174,000.00
June ₱ 80,000.00 ₱ 222,000.00 ₱ 64,000.00 ₱ 21,000.00 ₱ 137,000.00 ₱ 222,000.00
July ₱ 90,000.00 ₱ 246,000.00 ₱ 72,000.00 ₱ 21,000.00 ₱ 153,000.00 ₱ 246,000.00
Difference ₱ 30,000.00 ₱ 48,000.00
b. ₱ 1.60
a. ₱ 9,000.00
Variable Fixed Total
April ₱ 70,000.00 ₱ 198,000.00 ₱168,000.00 ₱ 30,000.00 ₱ 198,000.00
May ₱ 60,000.00 ₱ 174,000.00 ₱144,000.00 ₱ 30,000.00 ₱ 174,000.00
June ₱ 80,000.00 ₱ 222,000.00 ₱192,000.00 ₱ 30,000.00 ₱ 222,000.00
July ₱ 90,000.00 ₱ 246,000.00 ₱216,000.00 ₱ 30,000.00 ₱ 246,000.00
₱ 80,000.00 ₱192,000.00 ₱ 30,000.00 ₱ 222,000.00

Y = 30000 + 2.4X
Variable

Fixed
Mixed
Mixed
Fixed
Fixed
Mixed
VC & Segment Reporting
Example Per Unit Per Month
Selling Price ₱ 100,000.00
Direct Materials ₱ 19,000.00
Direct Labor ₱ 5,000.00
VMO ₱ 1,000.00
FMO ₱ 70,000.00
VS&A Exp ₱ 10,000.00
FS&A Exp ₱ 20,000.00

January February March

Beg Inv 0 0 1
Units Produced 1 2 4
Units Sold 1 1 5
Ending Inv 0 1 0

Variable Costing Contribution Format Income Statement

Direct Materials ₱ 19,000.00

Direct Labor ₱ 5,000.00
VMO ₱ 1,000.00
Unit Product Cost ₱ 25,000.00

January February March

Beg Inv 0 0 1
Units Produced 1 2 4
Units Sold 1 1 5
Ending Inv 0 1 0

Revenue ₱ 100,000.00 ₱100,000.00 ₱ 500,000.00

Variable Expenses
COGS ₱ 25,000.00 ₱ 25,000.00 ₱ 125,000.00
S&A Exp ₱ 10,000.00 ₱ 10,000.00 ₱ 50,000.00
Tot. Var. Exp. ₱ 35,000.00 ₱ 35,000.00 ₱ 175,000.00
Contribution Margin ₱ 65,000.00 ₱ 65,000.00 ₱ 325,000.00
Fixed Expenses
S&A Exp ₱ 20,000.00 ₱ 20,000.00 ₱ 20,000.00
FMO ₱ 70,000.00 ₱ 70,000.00 ₱ 70,000.00
Total Fixed Exp. ₱ 90,000.00 ₱ 90,000.00 ₱ 90,000.00
Total Net Inc/Loss -₱ 25,000.00 -₱ 25,000.00 ₱ 235,000.00

Absorption Costing Income Statement

January February March

Direct Materials ₱ 19,000.00 ₱ 19,000.00 ₱ 19,000.00
Direct Labor ₱ 5,000.00 ₱ 5,000.00 ₱ 5,000.00
VMO ₱ 1,000.00 ₱ 1,000.00 ₱ 1,000.00
FMO ₱ 70,000.00 ₱ 35,000.00 ₱ 17,500.00
Unit Product Cost ₱ 95,000.00 ₱ 60,000.00 ₱ 42,500.00

Revenue ₱ 100,000.00 ₱100,000.00 ₱ 500,000.00

COGS ₱ 95,000.00 ₱ 60,000.00 ₱ 230,000.00
Gross Margin ₱ 5,000.00 ₱ 40,000.00 ₱ 270,000.00
S&A Exp ₱ 30,000.00 ₱ 30,000.00 ₱ 70,000.00
Net Op Inc/Loss -₱ 25,000.00 ₱ 10,000.00 ₱ 200,000.00

Reconciliation of Variable Costing with Absorption Costing Income

January February March

 Beg Inv 0 0 1
Units Produced 1 2 4
Units Sold 1 1 5
Ending Inv 0 1 0

FMO in End Inv 0 1 0

Deduct: FMO in Beg Inv 0 0 1
FMO Deferred (Released) 0 1 -1

Total FMO Past ₱ - ₱ - ₱ 35,000.00

Total FMO Produced ₱ 70,000.00 ₱ 70,000.00 ₱ 70,000.00
Total FMO As Of Now ₱ 70,000.00 ₱ 70,000.00 ₱ 105,000.00
Total FMO Released ₱ 70,000.00 ₱ 35,000.00 ₱ 105,000.00
Total FMO Left ₱ - ₱ 35,000.00 ₱ -

Total FMO/Unit Produced Current ₱ 70,000.00 ₱ 35,000.00 ₱ 17,500.00

Total FMO/Unit Produced Past ₱ - ₱ - ₱ 35,000.00

January February March

FMO in End Inv ₱ - ₱ 35,000.00 ₱ -
Deduct: FMO in Beg Inv ₱ - ₱ - -₱ 35,000.00
FMO Deferred (Released) ₱ - ₱ 35,000.00 -₱ 35,000.00

Variable Costing Net Op Inc/Loss -₱ 25,000.00 -₱ 25,000.00 ₱ 235,000.00

Add/Deduct: FMO Deferred/Release ₱ - ₱ 35,000.00 -₱ 35,000.00
Absorption Costing Net Op Inc/Loss-₱ 25,000.00 ₱ 10,000.00 ₱ 200,000.00

E6-1
Units BG Inv 0 Variable Costing ₱ 480.00
Units Prod 250 Absorption Costing ₱ 700.00
Units Sold 225
Units End Inv 25

DM ₱ 100.00
DL ₱ 320.00
VMO ₱ 40.00
V S&A Exp ₱ 20.00

FMO ₱ 60,000.00 ₱ 240.00 ₱ 6,000.00

F S&A Exp ₱ 20,000.00

E6-2
Sales ₱ 191,250.00 Sales ₱191,250.00
COGS ₱ 157,500.00 COGS ₱108,000.00
Gross Margin ₱ 33,750.00 CM ₱ 83,250.00
Selling & Admin Exp ₱ 24,500.00 Fixed Exp ₱ 80,000.00
Net Operating Income ₱ 9,250.00 Net Operating Inc ₱ 3,250.00

Variable Costing Net Op Inc/Loss ₱ 3,250.00

Add: FMO Deferred ₱ 6,000.00
Absorption Costing Net Op Inc/Loss ₱ 9,250.00

E6-21
Sales ₱ 750,000.00
Variable Expenses ₱ 336,000.00
Contribution Margin ₱ 414,000.00
Fixed Expenses ₱ 378,000.00
Net Operating Income ₱ 36,000.00
 Total North South
Sales ₱ 750,000.00 ₱300,000.00 ₱ 450,000.00
Variable Expenses ₱ 336,000.00 ₱156,000.00 ₱ 180,000.00
Contribution Margin ₱ 414,000.00 ₱144,000.00 ₱ 270,000.00
Traceable Fixed Expenses ₱ 228,000.00 ₱120,000.00 ₱ 108,000.00
Segment Division Margin ₱ 186,000.00 ₱ 24,000.00 ₱ 162,000.00
Common Expenses ₱ 150,000.00
Net Operating Income ₱ 36,000.00

Total Paks Tibs

Sales ₱ 300,000.00 ₱ 50,000.00 ₱ 250,000.00
Variable Expenses ₱ 156,000.00 ₱ 11,000.00 ₱ 145,000.00
Contribution Margin ₱ 144,000.00 ₱ 39,000.00 ₱ 105,000.00
Traceable Fixed Expenses ₱ 70,000.00 ₱ 30,000.00 ₱ 40,000.00
Segment Division Margin ₱ 74,000.00 ₱ 9,000.00 ₱ 65,000.00
Common Expenses ₱ 50,000.00
Net Operating Income ₱ 24,000.00

E7-25 Y1 Y2 Y3
Sales ₱ 800,000.00 ₱640,000.00 ₱ 800,000.00 ₱ 16.00 ₱ 16.00 ₱ 16.00
COGS ₱ 580,000.00 ₱400,000.00 ₱ 620,000.00 ₱ 11.60 ₱ 10.00 ₱ 12.40
Gross Margin ₱ 220,000.00 ₱240,000.00 ₱ 180,000.00 ₱ 4.40 ₱ 6.00 ₱ 3.60
S & A Exp ₱ 190,000.00 ₱180,000.00 ₱ 190,000.00 ₱ 3.80 ₱ 4.50 ₱ 3.80
Net Op Inc/Loss ₱ 30,000.00 ₱ 60,000.00 -₱ 10,000.00 ₱ 0.60 ₱ 1.50 -₱ 0.20

Production Units ₱ 50,000.00 ₱ 60,000.00 ₱ 40,000.00

Sales Units ₱ 50,000.00 ₱ 40,000.00 ₱ 50,000.00
Carry Over ₱ - ₱ 20,000.00 -₱ 10,000.00
Start Total Units ₱ 50,000.00 ₱ 60,000.00 ₱ 60,000.00
Sold Units ₱ 50,000.00 ₱ 40,000.00 ₱ 50,000.00
End Inv ₱ - ₱ 20,000.00 ₱ 10,000.00

Variable Manufacturing Exp ₱ 2.00

Fixed Manufacturing Overhead ₱ 480,000.00
FMO Rate ₱ 9.60 ₱ 8.00 ₱ 12.00
Var Sel & Ad Exp ₱ 1.00
Fix Sel & Ad Exp ₱ 140,000.00
FIFO
Total Y1 Y2 Y3
Sales ₱2,240,000.00 ₱800,000.00 ₱ 640,000.00 ₱800,000.00
Variable Expenses
COGS ₱ 280,000.00 ₱100,000.00 ₱ 80,000.00 ₱100,000.00
V Sel & Ad Exp ₱ 140,000.00 ₱ 50,000.00 ₱ 40,000.00 ₱ 50,000.00
Total Variable Expenses ₱ 420,000.00 ₱150,000.00 ₱ 120,000.00 ₱150,000.00
Contribution Margin ₱1,820,000.00 ₱650,000.00 ₱ 520,000.00 ₱650,000.00
Fixed Expenses ₱1,440,000.00 ₱480,000.00 ₱ 480,000.00 ₱480,000.00
Fix Sel & Ad Exp ₱ 420,000.00 ₱140,000.00 ₱ 140,000.00 ₱140,000.00
Total Fixed Expenses ₱1,860,000.00 ₱620,000.00 ₱ 620,000.00 ₱620,000.00
Net Operating Income -₱ 40,000.00 ₱ 30,000.00 -₱ 100,000.00 ₱ 30,000.00

Start Total Units ₱ 50,000.00 ₱ 60,000.00 ₱ 60,000.00

Sold Units ₱ 50,000.00 ₱ 40,000.00 ₱ 50,000.00
End Inv ₱ - ₱ 20,000.00 ₱ 10,000.00
₱160,000.00 ₱ 160,000.00
₱ 120,000.00

Variable Costing Net Op Inc/Loss ₱ 30,000.00 -₱100,000.00 ₱ 30,000.00

Add: FMO Deferred ₱ - ₱160,000.00 ₱ 120,000.00
Deduct: FMO Released -₱ 160,000.00
Absorption Costing Net Op Inc/Loss ₱ 30,000.00 ₱ 60,000.00 -₱ 10,000.00