Exercise 5-8
Exercise 5-8
A.
B.
C.
D.
E.
1.
TOTAL
Sales ₱25 * 40,000 units 1,000,000
Variable Cost ₱15 * 40,000 units (600,000)
Contribution Margin ₱10 * 40,000 units 400,000
Fixed Cost (350,000)
Profit ₱ 50,000
2.
Breakeven point in sales = Fixed cost
Contribution Margin Ratio
Breakeven point in sales = 350,000
40% VCIS*
Breakeven point in sales = 875,000
Sales
Variable Cost
Breakeven point in units = Fixed cost Contribution Margin
Contribution Margin in units Fixed Cost
Breakeven point in units = 350,000 Profit
10
Breakeven point in units = 35,000
3.
4.
Suggested Format:
(A) (B) (C)
Sales 1200000 950000 1000000
Variable Cost 600000 570000 660000
Contribution Margin 600000 380000 340000
Fixed Cost 350000 350000 350000
Profit 250000 30000 -10000
Profit Percentage 20.83% 3.16% -1.00%
Break-even Point
- unit
- sales
Margin of Safety
30 38,000 units 16.5
Selling Price 25
Variable Cost 15
Fixed Cost 350,000
Units 40,000
PRICE PERCENTAGE TOTAL
₱25 100% 875,000
₱15 60% 525,000
₱10 40% 350,000
(350,000)
0
(D) (E) (F) (G)
1000000 1440000 500000 925000
600000 1080000 300000 511000
400000 360000 200000 414000
360,000 350000 300,000 350,000
40,000 10000 -100000 64000
4.00% 0.69% -20.00% 6.92%