Problem 1

1. 0.6 or 60%
2. 0.4 or 40%
3. 8,000 units
4. P480,000
Problem 2
1. 495 units of helmets
2. P495,000
3. Total Per Unit
Sales 10,000,000 1000
Variable Cost 7,000,000 700
Contribution Margin 3,000,000 300
Fixed Cost 148,500
Operating income. 2,851,500

Break even point in sales = Total Fixed Cost / CM ratio

= 148,500 / 0.3
= 495,000
Variable Cost ratio = Variable cost / sales
= 7,000,000 / 10,000,000
= 0.7 or 70%
CM ratio = 1-Variable cost ratio
= 1-0.7
= 0.3 or 30%
Problem 3
1. 420 units
2. 0.4 or 40%
3. BEP (UNITS) = 1,500 units
BEP (PESOS) = P1,575,000
4. 90 units
Problem 4
1. BEP (UNIT) = 135 units
BEP (PESOS) = 5,400,000
2. X100 = 34 units
X950 = 34 units
C800 = 8 units
Problem 5
1. BEP(UNITS) = 510 units
BEP (SALES) = 51,000
2. 35,000
3. 1,135 haircuts
4. 100.27 per haircuts
100oblem 6
1. 78,300 units
2. P1,566,000
3. 0.4 or 40%
4. Margin of safety = 914,000
Margin of safety ratio = 0.37 or 37%
Problem 7
1. P500,000
2. 250,000
3. 0.33 or 33%
4. 3
5. 250,000
Multiple choice – Theories
1. B 6.D
2. B. 7.C
3. C. 8. A
4. A. 9. B
5. A. 10. B
A