ACCT 034 PREFINALS MANAGERIAL ACCOUNTING

Choose the correct answer and provide solution for each problem

1.At a volume of 15,000 units, Boston reported sales revenues of P600,000, variable costs of P225,000, and fixed costs of P120,000.The company's contribution margin per unit is:

a.17.

b.25.

c.47.

d.55.

2.A recent income statement of Banks Corporation reported the following data:

Sales revenue P8,000,000

Variable costs 5,000,000

Fixed costs 2,200,000

If these data are based on the sale of 20,000 units, the contribution margin per unit would be:

a.40.

b.150.

c.290.

d.360.

3.Orion recently reported sales revenues of P800,000, a total contribution margin of P300,000, and fixed costs of P180,000.If sales volume amounted to 10,000 units, the company's variable cost per unit must have been:

a.12.

b.32.

c.50.

d.92.

Below is an income statement for Thompson Company:

Sales P400,000

Variable costs (125,000)

Contribution margin P275,000

Fixed costs (200,000)

Profit before taxes P 75,000

4.Refer to Thompson Company. Based on the cost and revenue structure on the income statement, what was Thompson's break-even point in dollars?

a. 200,000

b. 325,000

c. 300,000

d. 290,909

5.Refer to Thompson Company. What was Thompson's margin of safety?

a. 200,000

b. 75,000

c. 100,000

d. 109,091

The following information relates to financial projections of Folk Company:

Projected sales 60,000 units

Projected variable costs P2.00 per unit

Projected fixed costs P50,000 per year

Projected unit sales price P7.00

6.Refer to Folk Company. How many units would Folk Company need to sell to earn a profit before taxes of P10,000?

a. 25,714

b. 10,000

c. 8,571

d. 12,000

Eclectic Corporationmanufactures and sells two products: A and B. The operating results of the company are as follows:

Product A Product B

Sales in units 2,000 3,000

Sales price per unit P10 P5

Variable costs per unit 7 3

In addition, the company incurred total fixed costs in the amount of P9,000.

7.Refer to Eclectic Corporation.. How many total units would the company have needed to sell to break even?

a. 3,750

b. 750

c. 3,600

d. 1,800

8.Refer to Eclectic Corporation. How many units would the company have needed to sell to produce a profit of P12,000?

a. 8,750

b. 20,000

c. 10,000

d. 8,400

Below is an income statement for Brittany Company:

Sales P300,000

Variable costs (150,000)

Contribution margin P150,000

Fixed costs (100,000)

Profit before taxes P 50,000

9.Refer to Brittany Company.What was the company's margin of safety?

a. 50,000

b. 100,000

c. 150,000

d. 25,000

10.Refer to Brittany Company. If the unit sales price for Brittany's sole product was P10, how many units would it have needed to sell to produce a profit of P40,000?

a. 27,500

b. 29,000

c. 28,000

d. can't be determined from the information given