Daryll John O.

Bacayo
BSBA 301

The management of Unicorn Cereals Inc. desires to achieve a profit of P200,000 by selling 1,000
boxes of their breakfast cereals. The fixed cost of producing their product is P300,000, while the
variable cost per cereal box is P100.
A. Price per box of breakfast cereals (10 points)

xp = vx + FC + Desired Profit
1,000 = (1,000) (100) + 300,000 + 200,000
1,000 = 100,000 + 300,000 + 200,000
1,000 = 600,000
P = 600

A pack of Clean and Clear Detergents is being sold at a market price of P15. The variable cost
incurred in producing a pack of detergent is P5, while the fixed expense of the business is P4,000
per year.
A. Contribution per unit
Contribution per unit = Selling price per unit – Variable cost per unit
= 15 – 5
= 10

B. Profit – volume ratio

P/V ratio = Contribution per unit x100

Selling price per unit
= 10 x 100
15
= 0.67
= 66.67%
C. Break-even point inunits

BEP in units = Fixed cost

Contribution per unit

= 4,000
10
= 400

D. Break-even point in values

BEP in Values = Fixed Cost
P ratio
V
= 4,000
0.67
= 5,970.15

E. The total contribution for sales of 500 units

Total Contribution = Estimated no. of units for sale x Contribution per unit
= 500 x 10
= 5,000
F. Profit for sales of 500 units

Profit = Total Contribution – Total fixed cost

= 5,000 – 4,000
= 1,000

G. Required sales to earn a profit of P80,000 in annual terms

Required sales = Fixed cost + Desired Profit

P
V Ratio
= 4,000 + 80,000
0.67

= 84,000
0.67
= 125,373.13