Question
Cara Company produces and sells a single product. The selling price is P 25 and the variable costs is P 15 per unit.The company's fixed
Cara Company produces and sells a single product. The selling price is P 25 and the variable costs is P 15 per unit.The company's fixed costs is P 100,000 per month. Average monthly sales is 11,000 units
1. The company's contribution margin per unit and as a percentage of sales is
10 units; 40%
P 10 per unit; 40%
P40 per unit; 16%
P 10 per unit; 60%
2. The company's break-even point is
250,000 units
P 10,000
25,000 units
10,000 units or P 250,000
3. If the company desires to earn profit of P 20,000 before tax, it must generate sales of
P 12,000
300,000 units
10,000 units or P 250,000
12,000 units or P 300,000
4. If the company pays corporate income tax at the rate of 32% and it desires to earn after-tax profit of P 20,400, it must generate sales of
P 325,000 or 13,000 units
16,375 units or P 409,375
P 13,000 or 325,000 units
12,040 units or P 301,000
5. How much sales (in pesos) must be generated to earn profit that is 8% of such sales?
P 230,000
P 208,333.33
P 270,000
P312,500
6. How many units must be sold to earn profit of P 2 per unit?
12500
10000
312500
8333.33
7. With an average monthly sales of 11,000 units, the company's margin of safety is
1,000 units or P 25,000
11,000 units or P 275,000
10,000 units or P 250,000
P 10,000 or 25,000 units
8. At the present average monthly sales of 11,000 units, the company's operating leverage factor (OLF) is
9.09
11
90.9
6
9. If fixed costs will increase by P 20,000, the break-even point in units will increase(decrease) by
2000
12000
50000
10000
10. If variable costs per unit will go up by P 5, the pesos break-even sales will increase(decrease) to
P500,000
P250000
-250000
-500000
11. If the selling price will increase to P 30, the break-even point in units will
decrease to 6,666.67
decrease by P 166,666.75
remain unchanged
decrease by 6,666.67
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