Reference no: EM132875820
Question -
A. Use the following information to answer the six questions below.
Variable Manufacturing Cost Per Unit 20
Variable selling cost per unit 25
Selling Price per unit 100
Fixed Manufacturing cost per unit 30
Fixed selling cost per unit 10
Expected production and sales 1000 units
1. Determine the Contribution Margin per unit?
2. Determine the Contribution Margin ratio?
3. Determine the Break-even point for the product?
4. If the firm wants to earn P70,000 in pre-tax profit, sales revenue must be equal to?
5. If the firm wants to earn P70,000 in pre-tax profit, contribution margin must equal to?
6. If the tax rate is 40 percent how many units must be sold to earn an after tax profit of P60,000?
B. The following are taken from Green Company's income statement:
Net Income P30,000
Fixed Costs 90,000
Sales 200,000
Contribution Margin Ratio 60%
1. Determine the company's margin of safety amount?
2. Determine the margin of safety in percentage form?
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