1.

A manufacturer produces certain items at a labor cost per unit of P315, material cost per
unit is P100, variable cost of P3 each. If the item has a selling price of P995, how many
units must be manufactured each month for the manufacturer to break-even if the monthly
overhead is P461,600?

Labor Cost= P315/unit (x)

Material Cost= 100/unit (x)
Variable= 3 each (x)
Overhead= 461,600
Selling Price= 995 (x)

X= Number of units to break-even

995x=315x+100x+3x=461,600
995x – 315x – 100x – 3x = 461,600
577 = 461,600

𝑿 = 𝟖𝟎𝟎 𝒖𝒏𝒊𝒕𝒔

2. The annual maintenance cost of the machine shop is P69,994. If the cost of making a
forging is P56 per unit and its selling price is P135 per fogged unit, find the number of units
to be forged to break-even.

Maintenance = P69, 994

Forging Cost= 56/unit (x)
Selling Price= 135/unit (x)

135x= 69,994 + 56x

135x – 56x= 69, 994

𝑿 = 𝟖𝟖𝟔 𝒖𝒏𝒊𝒕𝒔

3. Compute the number of blocks that an ice plant must be able to sell per month to break-
even based on the following data:
Cost of electricity per block – P20

Tax to be paid per block – P2.0

Real State Tax – P3500 per month

Salaries and Wages – P25,000 per month

Others – P 12,000 per month

 Selling Price for Ice – P55 per block

4. A telephone switchboard 100 pair cable can be made up with either enameled wire or
tinned wire. There will be 400 soldered connections. The cost of soldering a connection
on the enameled wire will be P1.65, on the tinned wire it will be P1.15. A 100 pair cable
made up with enameled wire cost P0.55 per linear foot and those made up of tinned wire
cost P0.75 per linear foot. Determine the length of cable run in feet so that the cost of each
installation would be the same.

Enameled = Tinned
400 soldered connection

Cost of selling P1.65(400)= 660 P1.15(400) = 460

Cost per foot P0.55x P0.75x

660 + 0.55x = 460 + 0.75x

660 – 460 = 0.75x – 0.55x

𝑿 = 𝟏𝟎𝟎𝟎 𝒇𝒆𝒆𝒕

5. In steel fabrication shop located in Cebu, various size rivet holes must be made in
structural members. This may be done by laying out the position of the hole on the
members and using a drill press for this method, a machinist wage rate is P20.25 per hour
and he can drill 27 holes per hour. An alternative method is by the use of multiple punch
machine. In this process, The machinist wage rate is P20.00 per hour and he can complete
8 holes per minute. This method requires P0.50 per holes to set multiple punch machine
and an installation cost of P2,000. If all other cost are the same, for what number of rivet
holes will the multiple punch machine pay for itself?

1ST METHOD 2ND METHOD

Machinist P20.25/hr P20/hr
Number of Holes P27holes/hr 8holes/min
Others =

20.25/27 = 0.75/holes 20/8(60) = 0.0416/holes

0.75x= 0.0416x + 0.5x + 2000

𝑿 = 𝟗𝟓𝟗𝟕 𝑹𝒊𝒗𝒆𝒕 𝑯𝒐𝒍𝒆𝒔

6. Two workers A and B produced the same product on identical machines. A receives P25
per hour and he produces 100 units per hour. B is able to produce 120 units per hour. The
machine rate or cost of operation of the machine used by them is P100 per hour.

a.) Determined the cost per piece for worker A

b.) Determined the hourly wage of of worker B in order that his cost per piece will equal
that of A.

Worker A Worker B
Wages P25/hr X
Output 100 units/hr 120 units/hr
Cost of Operation P100/hr P100/hr

a.) P25/hr + 100/hr b.) x + P100 /hr

100 units/hr 120units/hr

= 𝑷𝟏. 𝟐𝟓/𝑼𝒏𝒊𝒕𝒔 𝒙 = 𝑷𝟓𝟎/𝒉𝒓

7. A machine used for cutting materials in a factory has the following outputs per hour at
various speeds and requires periodic tool regrinding at the interval cited

Speed Output per hour Tool Regrinding

A 200 pcs Every 8 hours
B 250 pcs Every 7 hours
C 280 pcs Every 5 hours

A set of tools cost P1,800 and can be ground 20 times. Each regrinding cost P18 and the
time needed to regrind and change tool is 1 hour. The machine operator is paid P28 per
hour, including the time the tool is changed. The tool grinder who also sets the tools to the
machine is paid P25 per hour. The hourly rate chargeable against the machine is P54,
regardless of machine speed. Which speed is more economical.