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Required:
1. Compute the contribution margin ratio, breakeven point in pesos, and operating
income.
CM Ratio = CM ÷ Sales
= 60,000 ÷ 150,000
CM Ratio = 40%
Total
Sales (30,000 units) 150,000
Less: Variable Costs 90,000
Contribution Margin 60,000
Less: Fixed Cost 50,000
Net Income 10,000
2. Calculate the new contribution margin ratio, breakeven point in pesos and operating
profit under each of the changes below:
a. Unit sales price increases by 15%
New Sales Price 5.75
New Sales Revenue 172,500.00
New CM 82,500.00
d. Unit sales price decreases by 20% and the sales volume increases by 20%
New Sales Price 4.00
New Sales Volume 36,000
New Sales Revenue 144,000.00
New CM 54,000.00
e. The selling price increases by Php0.50 per unit, fixed costs increase by Php
10,000 and the sales volume decreases by 5%.
New Sales Price 5.50
New Sales Volume 28,500
New Sales Revenue 156,750.00
New CM 66,750.00
f. Variable costs increase by Php 0.20 per unit, the selling price increases by
12%, and the sales volume decreases by 10%.
New Sales Price 5.60
New VC/Unit 3.20
New CM/Unit 2.40
New Sales Volume 27,000
New Sales Revenue 151,200.00
New CM 64,800.00