MANAGEMENT ACCOUNTING

Lecture Week 4 Activity

Solve the following problems.

1. Mr. A has a manufacturing business that is involved in manufacturing and selling a single
product. The annual fixed expenses to run the business are P15,000 and variable expenses are
P7.50 per unit. The sales price of the product is P15 per unit. Compute the breakeven point in
units and peso.

2. The following information were taken from the records of Babe Manufacturing Co. for the period
ending December 31, 2014. Compute for the breakeven level of sales.

COMPANY
A B C
Selling Price 60 80 40
Variable Cost 20 30 20
Contribution Margin 40 50 20

No. of Units Sold 2,000 3,000 5000

Fixed costs 40,000 40,000 40,000