Question
ABC Company manufactures and sells three products: Small, Medium, and Large. Annual fixed costs are Php 3,315,000, and data about the three products follow. Units
ABC Company manufactures and sells three products: Small, Medium, and Large. Annual fixed costs are Php 3,315,000, and data about the three products follow.
Units sold is 100,000.
Small | Medium | Large | |
Sales mix in units | 30% | 50% | 20% |
Selling price | Php250 | Php350 | Php500 |
Variable cost | 100 | 150 | 250 |
Consider the following independent cases:
Case 1 ::The sales mix for Good, Better, and Best is changed to 50%, 30%, and 20%, respectively.
Case 2: The sales volume increases by 10% and the price decreases by Php5.00 per unit for each product.
Case 3: The selling price decreases Php10.00 per unit, fixed expenses increase by Php20,000, and the sales volume decreases by 5%.
Case 4: The selling price increases by 25% for each product, variable expense increases by Php7.50 per unit for each product, and the sales volume decreases by 15%.
Case 5: The selling price increases by Php15.00 per unit per product, variable cost increases by Php10.00 per unit for each product, fixed expenses decrease by Php25,000, and sales volume decreases by 12%.
Required:
For each of the preceding independent cases, prepare a summary table for the following:
- A Contribution Margin format Income Statement.
- The break-even volume in units for each product.
- The total number of units that must be sold to obtain a profit for the company of
- Php200,000.
- Php234,000.
- Php300,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started