Kathlyn Jambalos

Desiree Villanueva
Frenzie Mae Magyaya
Fritz Medallon

Nancy Corporation
Income Statement
For the Year Ended December 31, 2021

Sales (20,000 units) P 300,000

Less: Cost of Goods Sold 180,000

Gross income 120,000

Less Selling and administrative expenses 80,000

Operating income P 40,000

Other data:
1/3 of the cost of goods sold is fixed
75% of the selling and administrative expenses is variable.

A. Total fixed cost

Cost of good sold 180,000

Cost of goods sold is fixed (⅓)
Total fixed cost 60,000

B. Variable cost per unit and variable cost ratio

Cost of goods sold 180,000

Number of units 20,000
Variable cost per unit 9

Sales 300,000
Number of unit 20,000
Selling price per unit 15

Variable cost per unit 9

Selling price per unit 15
 Variable cost ratio 0.6 or 60%

C. Contribution margin per unit and contribution margin ratio

Selling price per unit 15

Variable cost per unit 9
Contribution margin per unit 6
Contribution margin per unit 6
Selling price per unit 15
Contribution margin ratio 0.4 or 40%

D. Break-even point in units and in pesos

Total fixed cost 80,000

Contribution margin per unit 6

Break-even point in unit 13,333.33

Total fixed cost 80,000

Contribution margin ratio 40%

Break-even point in pesos 200,000

E. Margin of safety in units and in pesos

Sales unit 20,000

Break-even point in unit 13,333.33
Margin of safety in units 6,666.67

Sales 300,000
Break-even point in pesos 200,000
Margin of safety in pesos 100,000

F. Margin of safety ratio and break-even sales ratio

Margin of safety in pesos 100,000

Sales 300,000
Margin of safety ratio 33.33%

Break-even point in pesos 200,000

Sales 300,000
Break-even sales ratio 66.67%