SOLUTIONS: CVP ANALYSIS

#1. AB Co. CD Co.

BEP-PESOS= 50000 70000
40% 52%
125,000.00 134,615.38 a

#2. indifference point let x=indifference point in sales

Fixed cost+Variable cost= Fixed cost+Variable cost
Fixed cost+VCR(X) = Fixed cost+VCRX)
50000+.6x = 70000+.48x
.6x-.48x = 70000-50000
0.12 x = 20000 20000/.12
x = 166,666.67 c 166,666.67

#3. d
Sales 166,666.67 166666.67
Variable cost 100,000.00 60% 80,000.00 0.48
CM 66,666.67 86,666.67
Fixed cost 50,000 70,000
Profit 16,666.67 16,666.67 d

#7 to 18
#7 Units Peso
SP 25 11000 275,000 100%
VC 15 165,000 60%
CM 10 110,000 40% a

#8
Pesos Units
Break even point 100000 100000
40% 10

250,000 10,000 c

#9.
Sales = FC+P 100000+20000
CMR 40%

120000 300,000
40%

FC+P 100000+20000
Cmu 10

120000 12,000 units

10

#10. units
Sales 25 13,000 325,000 a
VC 195,000 60%
CM 130,000 40%
FC 100,000
Profit before tax 30,000
Tax 9,000 30%
Profit after tax 21,000 70%
or
FC+oper.income FC+oper.income
10 40%

130000 130000
10 40%
= 13,000 325,000.00 a

#11.
Sales = FC+P 100000+.08S
40% 0.4
.4S-.08S = 100000
S = 100000
0.32
S = 312,500 b 3125000

#12.
Sales = FC + 2(S) 100000+2S
10
10S = 100000+2S

8S = 100000 100000
8
S = 12,500 units c

#13.
MS = Sales-BES

MS = 275000-250000
= 25,000 pesos a

Units Pesos
Ave. mo. Sales 11,000 275,000
less: BES 10,000 250,000
MS 1,000 25,000 a

#14.
MSR BESR
25000/275000 250000/275000
9% 91%
#15
units SP
Sales 11000 25 275,000
VC 165,000
CM 110,000 40%
FC 100,000
Profit 10,000

OLF = TCM 110,000

Profit bef. Tax 10,000

OLF = 11 b

#16 d
Increase in BEP= Increase in FC 20000
UCM 10
= 2,000 units
#17.
BEP FC 100000
UCM 5
20,000 units
25 selling price
BEP = 500,000 pesos a

#18.
SP 30
VC 15
CM 15

BEP FC 100000 = 6,666.67 units c

UCM 15

#20.
OLF = TCM or % change in profit befor tax
Profit befor tax % change in sales

5= % change in profit bef. Tax

900000-800000
5= % change in profit
100000/800000
5= % change in profit
0.125
62.5% = % change in profit a

#21
DOL = TCM
Profit

profit 300000/4 75,000

increase previous
Sales 100000 500000 400000
VC 40,000 200000 160000 0.4
CM 60,000 300000 240000 0.6
FC 180000 180000
Profit 120000 60000

% change in profit = % change in sales x DOL

100% = % change in salesx 4
100%/4 % change in sales
=
% increase in sales 25%
present sales 500000 125%
increase in sales (25%) 100000 25%
previous sales 400000 100%

OLF TCM
profit

4= 240000
profit
profit = 60,000

#22-#24
#22
Product 1 Product 2
UCM 6 4
multipled by: Sales mix
Product 1 - 3/5 60%
Product 2- 2/5 40%
WCM/u 3.6 1.6 5.20 a

#23

BEP-units = FC 234000
WCM/u 5.2
45,000
Product 1 Product 2
45000x60% 27,000 b
45000x40% 18,000 b

#24. Product 1 Product 2

Sales mix rate 60/108 56% 48/108 44%
xCMR (6/20) 30% (4/24) 16.67%
Weighted CMU 16.67% 7.41% 24.07%
Weighted average CMU rounded to 24% a
or
WACM/unit TCM
Total Sales
26
108 24%
Product 1 Product 2
Total Sales 3x20 60 2x24 48 108
VC 14x3 42 20x2 40
TCM 18 8 26

#25 to 27
#25
Sales 40000x50 2,000,000
Variable cost(40000x20) (800,000) -40%
Fixed costs (900,000)
Profit 300,000 b

#26
Let x=Selling price
Sales = VC+FC+Profit
40000x = {40000xP20)+900000+(20%(40000X)
= 800000+900000+8000X
40000x-8000x 1700000
32000 x 1700000
x = 53.125

#27 b

#28.
MS= Sales-BES
20000x120-900000 2400000-900000
1,500,000 pesos
12,500 units
MSR 1500000/2400000 62.50%

BES= FC 15x20000
CMR 1/3
300000
1/3
BES= 900000

#29. 100 units

SP 20 2000 20
VC 14 1400 16
CM 6 600 4
FC - assume 600

BES 600 increase 600

6 4
100 50 150
50/100 50%

#30 without raffle

BES= FC 120000
CMR 30%
400,000 d

#31 with the raffle

BES FC 120000+15000+10000
CMR 20%
SP Units
Sales 50 20,000 1,000,000
VC 35+5 20000 800,000
CM 200,000 0.2

BES= 145000 725,000 a

0.2

#32. w/o raffle with raffle

Sales(1000000x1.5) 1,000,000 1,500,000
VC (800000x1.5) 700,000 1,200,000
CM 300,000 300,000
FC 120,000 145,000
Profit 180,000 155,000
decrrease 25,000 c

#33.
w/o raffle With raffle
Sales(1000000x1.5) 1,000,000 2,525,000 a
VC (800000x1.5) 700,000
CM 300,000 505,000 20%
FC 120,000 145,000
Profit 180,000 360,000

#34. Sales BES MS

300000 180,000 120000
VC 80% 144,000
CM 36,000
FC 36,000 d
Budgeted
#35. Sales BESR=60% MS=40%
Sales 500000 300,000 200000
VC-70% 350000 210,000
CM 150,000 90,000
FC 90,000 90,000
Profit 60,000 -
b
Budgeted
#36 Sales BES MS
Sales 4.25 329375 263,500 65875
VC 1.20 93000 74,400 0.2823529
CM 189,100
FC 189,100
Profit 0

VC per unit 1.20 a

#37 SP
Sales 21,600,000 22,200,000 185 d
VC 19,800,000 19,800,000
CM 0.0833333333 1,800,000 2,400,000
FC 1,500,000 2,100,000
Profit 300,000 300000
Items 1-4

1. Break even points

AB CD
BEP= FC FC
CMR CMR

50,000 70,000
40% 52%
125,000 134,615.38 a

2. Indifference point let x= Indifference point in sales

Fixed cost+variable cost= Fixed cost+variable cost=
50000+.6X = 70000+.48x
.6x-.48X = 70000-50000
0.12 X = 20000
X = 20000/.12
X = 166,666.67 c

3. Profit at the indifference point

AB CD
Sales 166,666.67 166,666.67
VC 100,000.00 80,000.00
CM 66,666.67 86,666.67
FC 50,000.00 70,000.00
Profit 16,666.67 16,666.67 d

#7-#18. BB Corp.

#7. Per unit %

Sales 25
VC -15
CM 10 40% a

#8.
Units Peso
BEP FC FC
UCM CMR

100,000 100,000
10 40%
BEP 10,000 units 250,000 c

#9.
Units Peso
Target sales FC+ desired profit FC+ desired profit
UCM CMR

100000+20000 100000+20000
10 40%
= 12,000 units 300,000 d

#10.
Units Peso
FC+ desired profit FC+ desired profit
target sales UCM CMR

100000+(21000/.7) 100000+21000/.7)
10 40%
100000+30000 100000+30000
10 40%
= 130000 130000
10 40%
= 13,000 units 325,000 a

#11.
Target sales S= FC+ desired profit
CMR

S= 100000+.08(S)
40%
.4S = 100000+.08(S)
.4S-.08S = 100000
.32S 100000
S= 100000
0.32
S= 312,500 b

#12.
Target sales S= FC+ desired profit
CM/U

S= 100000+(2S)
10

10S= 100000+2S
10S-2S = 100000
8S = 100000
S = 100000/8
S = 12,500 units c

#13.
Units Pesos
Sales 11,000 275,000
BES 10,000 250,000
margin of safety 1,000 25,000 a

#14.
MSR BESR
25000/275000 250000/275000
9% 91% a

#15.
DOL or OLF= Total CM
profit befor tax

Sales 11000 25 275,000

Variable cost 15 165,000
CM 110,000
Fixed cost 100,000
profit befire tax 10,000

DOL or OLF= Total CM 110,000

profit befor tax 10,000
= 11 b

#16.
BEP-units = FC 120000
CM/U 10
= 12,000 units
10,000
increase in BEP units 2,000 units d
or
Increase in BEP= Increase in FC 20000
UCM 10
= 2,000 units

#17.
BEP-peso = FC 100,000
CMR 5/25 20%
New BEP 500,000 a
prev. BEP 250,000
increase in BEP 250,000

#18.
SP 30
VC 15
CM 15

BEP 100,000 6,666.67 c

15
#20.
% change in profit = % change in sales x DOL
= 100000/800000 x 5
0.125 x 5
% change in profit = 62.5% increase a

#21.

% change in profit = % change in sales x DOL

100% = % change in sales x 4
100%/4 = % change in sales
25% = % change in sales

Present sales 500,000 125%

increase 100,000 25%
previous sales 400,000 100%
Previous Increase Present
Sales 400,000 100,000 500,000
VC 160,000 40,000 200,000 40%
CM 240,000 60,000 300,000 60%
Fixed cost 180,000 180,000
Profit 60,000 120,000

#22. to 24