Cost Accounting
PROBLEM 1 Use the following information for the next two (2) questions: Stairway Company sells a single product. The company's most recent income statement is given below: Sales (5,000 units) 200,000 Less: Variable expenses 120,000 Contribution margin 80,000 Less Fixed overhead 48,000 Operating income 32,000 1. What is the contribution margin per unit? If sales are doubled to P400,000, how much is the total expected variable cost? AWN: If sales are doubled to P400,000, how much is the expected total fixed cost? If 100 more units are sold, how much increase in profit is expected? PROBLEM 2 Janet Company produces a game that sells for P17 per game. Variable expenses are P9 per game and fixed expenses total P172,000 annually. The contribution margin ratio is closest to: PROBLEM 3 Double Dragon Company produced 500 units of a product and incurred the following costs: Direct materials P 8,000 Direct labor 10,00 Overhead (20% fixed) 45,000 If sales revenue of 500 units is P102,000, what is the contribution margin percentage? PROBLEM 4 A recent income statement of Nixon Corporation reported the following data: Sales revenue P 5,000,000 Variable costs 3,000,000 Fixed costs 1,600,000 If these data are based on the sale of 10,000 units, the contribution margin per unit would be? PROBLEM 5 The following information pertains to Rica Company: Variable Fixed Manufacturing costs P340,000 P 70,000 Selling and administrative expenses 10,000 60,000 During the year, the company sold 50,000 units for P1,000,000. How much is Rica's break-even point in number of units? PROBLEM 6 DEF Company is a retailer for video disks. The projected net income for the current year is P200,000 based on sales volume of 200,000 video disks. DEF has been selling the disk for P16 each. The variable cost consist of P10 unit purchase price of the disks and handling cost of P2 per disk. DEF's annual fixed costs are P600,000. What is the company's break-even point for the current year in number of video disks? PROBLEM 7 Asher Company manufactures fans with direct material costs of P10 per unit and direct labor of P7 per unit. A local carrier charges Asher P5 per unit to make deliveries. Sales commissions are paid at 10% of the selling price. Fans are sold for P100 each. Indirect factory costs and administrative costs are P6,800 and P37,200 per month, respectively. How many fans must Asher produce to break even? PROBLEM 8 Given the selling price at P120 per unit; contribution margin ratio at 25% and fixed costs of P250,000, the total variable expenses at the break-even point would be: PROBLEM 9 The following information pertains to Mete Company: Sales P400,000 Variable costs 80,000 Fixed costs 20,000 Mete's breakeven point in peso sales is ? PROBLEM 10 Use the following information for the next two (2) questions: Swift, Inc., produces only two products, AAA and BBB. These account for 60% and 40% of the total sales of Swift, respectively. Variable costs (as a percentage of sales peso) are 60% for AAA and 85% for BBB. Total fixed costs are P150,000. There are no other costs. What is Swift's breakeven point in peso? Assume that the total fixed costs of Swift increase by 30%, what amount of total sales would be necessary to generate a net income of P9,000? PROBLEM 11 John Jordan, a sole proprietor, had the following projected figures for next year: Variable cost per unit P30.00 Total fixed costs P210,000 What selling price per unit is needed to obtain a before-tax profit of P90,000 at a volume of 4,000 units? PROBLEM 12 For its most recent fiscal year, Corn Company reported that its contribution margin was equal to 40 percent of sales and that its net income amounted to 10 percent of sales. If its fixed cost for the year were P60,000, how much was the margin of safety? PROBLEM 11 Black Corporation breakeven point was P780,000. Variable expenses averaged 60% of sales, and the margin of safety was P130,000. What was Black's contribution margin? PROBLEM 13 Worthy Company has sales of P200,000, a contribution margin of 20% and a margin of safety of P80,000. What is Worthy's fixed cost? PROBLEM 14 The following information pertains to Clove Company for the year ending December 31, 2021: Budgeted sales P 1,000,000 Breakeven sales 700,000 Budgeted contribution margin 600,000 What is Clove's margin of safety
