ACCOUNTING

Problems Problem 1 (Computing and Using the CM Ratio) Last month when Fiesta, Inc., sold 50,000 units, total sales were P200,000, total variable expenses were P120,000, and fixed expenses were P65,000. Required: 1. What is the company's contribution margin (CM) ratio? 2. Estimate the change in the company's net operating income if it were to increase its total sales by P1,000. Problem 2 (Compute the Break-even Point) Mario Company distributes a single product, a woven basket whose selling price is P15 and whose variable expense is P12 per unit. The company's monthly fixed expense is P4,200. Required: 1. Solve for the company's break-even point in unit sales using the equation method