PROBLEM SOLVING

1.)

Selling price 12.00

Less: Variable cost per unit (8.00)
Contribution Margin/unit 4.00

Fixed expense 150,000.00

Divided by:
Contribution Margin/unit 4.00
Breakeven in sales units 37,500.00

2.)
Sales in units (600,000 / 12.00) 50,000.00
Less: Breakeven in units (37,500.00)
12,500 units
Divided by: 50,000 units
Margin of safety 0.25

3.)

Sales 300,000.00
Variable cost (180,000.00)
Contribution margin 120,000.00
Fixed cost (160,000.00)
Loss (40,000.00)

Fixed cost 160,000.00

Divided by: UCM 5/unit *120,000/24,000*
Breakeven point (Units) 32,000.00

Units produced 24,000.00

Less: BEP (units) (32,000.00)
Additional units 8,000.00

4.)
Revenues 2,000,000 (100%)
Cost of goods sold
Variable 1,000,000 (50%)
Fixed 200,000 (10%) 1,200,000 (60%)
Gross profit 800,000 (40%)
Other operating expenses
Variable 400,000 (20%)
Fixed 300,000 (15%) 700,000.00
Operating income 100,000 (5%)
Fixed cost 500,000.00
Divided by: Contribution margin ratio 0.30
Breakeven point in pesos 1,666,667.00

5.)
Fixed cost 250,000.00
Divided by: Conrtribution margin ratio 0.25
Breakeven point in pesos 1,000,000.00
Less: Fixed cost (250,000.00)
Total variable expenses 750,000.00

6.)
Budgeted sales 3,000,000.00
Less: breakeven sales (2,100,000.00)
Margin of safety 900,000.00

7.)

Fixed cost 1,500,000.00

Add: Desired profit 1,000,000.00
2,500,000.00
Divided by: Contribution margin/ unit 3/unit (20% x 15 per unit)
Units must be sold 833,334.00
Sales 2,000,000.00
Variable cost (1,400,000.00)
Contribution margin 600,000.00

Contribution margin 600,000.00

Divided by: Sales 2,000,000.00
Contribution margin ratio 0.30
8.)
Fixed costs 1,420,000.00
Income before tax 176,000.00 (123,200/70%)
1,596,000.00
Divided by: Contribution margin 140.00 (200-40-20)
Target sales 11,400 units

9.)
Sales 400,000.00
Variable cost 300,000.00
Contribution margin 100,000.00
Fixed cost (120,000.00)
Loss (20,000.00)

10.) Product Y Product Z

Unit sale price 120.00 500.00
Variable cost (70.00) (200.00)
Contribution margin 50.00 300.00
X: Mix in units 0.60 0.40
30.00 120.00
Weighted average contribution margin 150.00

Fixed costs 300,000.00

Divided by: Contribution margin/unit 150.00
Breakeven in sales units 2,000 units

Allocate:
11.) Product Y Product Z
Sales in units 2,000.00 2,000.00
x
Mix in units 0.60 0.40
1,200.00 800.00
x
Unit sale price 120.00 500.00
144,000.00 400,000.00
Breakeven sales in pesos 544,000.00
Fixed cost 120,000.00
Divided by: CMR - Target margin 25% - 10%
Breakeven point in pesos 800,000.00

BEP in pesos 800,000.00

Less: Sales of Netter & company (400,000.00)
Sales in order to get the target margin 400,000.00