COST-VOLUME PROFIT ANALYSIS (SINGLE PRODUCT)

Mono Company produces a single product. The projected income statement

for the coming year follow:

Sales (50,000 units @ P2,2

P45) 50,000
1,30
Less: Variable Cost 5,000
9
Contribution Margin 45,000
8
Less: Fixed Costs 12,700
1
Operating Income 32,300

REQUIRED:
a. Compute unit contribution margin and the unit that must be sold
to break even.
b. Suppose that 30,000 units are sold above breakeven. What is the
operating income?
Refer to the original data in answering each of the following
questions:
c. Determine the number of units that must be sold to earn before
tax profit of P158,760.
d. Compute the amount of peso sales and in units that must be
generated to earn after tax profit of P138,915. (The income tax
rate is 30%).
e. Compute the amount of peso sales that the company must generate
to earn before tax profit of 22% of sales.
f. How many units must be sold to earn before tax profit per unit of
P3.90?
g. Compute the margin of safety in units and in pesos. What is the
margin of safety ratio?

COST-VOLUME PROFIT ANALYSIS (SALES MIX)

Valentines Cosmetics makes two facial cream, Allergy-free and
Cleansaway. Data are as follows:
Allergy- Cleansawa
free y
Price per jar 18 24
Variable cost per jar 9 6

Monthly fixed costs are P180,000.

REQUIRED:
1. If the sales mix in pesos is 60% for Allergy-free and 40% for
Cleansaway, what is the weighted contribution margin percentage?
What peso sales are needed to earn a profit of P60,000 per month?
At that level, how many units of each product, and total units,
will the company sell?

2. If the sales mix is 50% for each product in units, what is the
weighted average unit contribution margin? What unit sales are
needed to earn P60,000 per month? What are the total peso sales?