Answers

1B
2D
3C
4D
5A
6D
7B
8A
9D
10 D
11 B
12 B
1.)
Total fixed cost 800,000.00
Add: Desired profit 200,000.00
Divide: Contribution margin per unit 120.00
Desired sales on unit 8,333.33

2.)
A B Total
CM unit 20.00 45.00
Sales mix ratio 0.80 0.20
WACM 16.00 9.00 25.00

Fixed cost 200,000.00

Divide: WACM 25.00
Breakeven point in composite unit 8,000.00

3.)
Selling price per unit 5.00
Less: Variable cost per unit 3.00
Contribution margin per unit 2.00

Fixed cost 120,000.00

Divide: Contribution margin per unit 2.00
Breakeven point in units 60,000.00

4.)
Contribution margin 600,000.00
Divide: Net income 200,000.00
Degree of operating leverage 3.00

5.)
Before After
Sales 2,000,000.00 2,160,000.00
Less: Variable expenses 1,400,000.00 1,512,000.00
Contribution margin 600,000.00 648,000.00
Less: Fixed cost 400,000.00 400,000.00
Net income 200,000.00 248,000.00

Net profit after 248,000.00

Less: Net profit before 200,000.00
Increase in profit 48,000.00
Divide: Profit before 200,000.00
Increase in profit in percent 0.24

6.)
Before After
Sales 1,120,000.00 1,145,200.00
Less: Variable expenses 224,000.00 229,040.00
Contribution margin 896,000.00 916,160.00
Less: Fixed cost 719,000.00 739,000.00
Net income 177,000.00 177,160.00

Net profit after 177,160.00

Less: Net profit before 177,000.00
Increase in profit 160.00

7.)
Before After
Sales 600,000.00 650,000.00
Less: Variable expenses 120,000.00 188,500.00
Contribution margin 480,000.00 461,500.00
Less: Fixed cost 384,000.00 338,000.00
Net income 96,000.00 123,500.00

Net profit after 123,500.00

Less: Net profit before 96,000.00
Increase in profit 27,500.00

8.)
Cost Unit Ratio
Sales 625,000.00 25.00 100%
Less: Variable expenses 375,000.00 15.00 60%
Contribution margin 250,000.00 10.00 40%

Variable expenses 425,000.00

Variable expenses ratio 60%
Sales 708,333.33
Divide: Number of units 25,000.00
Selling price 28.33

9.)
Sales 21,600,000.00
Less: Variable expenses 19,800,000.00
Contribution margin 1,800,000.00
Less: Fixed cost 1,500,000.00
Net income 300,000.00

Net income 300,000.00

Add: Variable expense 19,800,000.00
Add: Fixed cost 2,100,000.00
Sales 22,200,000.00
Divide: Number of units 120,000.00
Selling price 185.00
1. 8,333
2. 8,000
3. 60,000
4. 3
5. 24%
6. 160
7. 27,500
8. 28
9. 185
 A B C
Selling price 150.00 210.00 360.00
Less: VC/unit 90.00 140.00 190.00
CM/unit 60.00 70.00 170.00
Multiply: Sales mix ratio 20% 20% 60%
WACM 12.00 14.00 102.00

Fixed cost 400,000.00

Divide: WACM 128.00
Breakeven point in composite unit 3,125.00

Allocation as to sales units

A B C
Breakeven point in composite unit 3,125.00 3,125.00 3,125.00
Multiply: Sales mix ratio 20% 20% 60%
Breakeven point in units, product 625.00 625.00 1,875.00

BEP in peso sales

A B C
Breakeven point in units, product 625.00 625.00 1,875.00
Multiply: Selling price 150.00 210.00 360.00
Breakeven point in peso sales 93,750.00 131,250.00 675,000.00

A B
Contribution margin 2,700,000.00 2,100,000.00
Divide: Net income 1,700,000.00 1,700,000.00
Degree of operating leverage 1.59 1.24
Total

128.00