Marta Mfg. Co. manufactures cellular phones. For the coming year, the company has budgeted the following...
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Marta Mfg. Co. manufactures cellular phones. For the coming year, the company has budgeted the following costs for the production and sale of 3,000 cellular units. Percentage Budgeted of costs Budgeted costs considered costs per Unit variable Direct materials P630,000 P210 100% Direct labor 300,000 100 100% Factory overhead 720,000 240 20% Selling & administrative expenses 600,000 200 25% Totals P2,250,000 P750 REQUIRED: 1. Compute the sales price per unit that would result in a budgeting operating income of P900,000, assuming that the company produces and sells 3,000 units. (Hint: First compute the budgeted sales revenue needed to produce this operating income.) 2. Assuming that the company decides to sell the cellular units at a unit price of P1,250 per unit, compute the following: a. Total fixed costs budgeted for the year. b. Variable costs per unit. c. The unit contribution margin. d. The number of cellular units that must be produced and sold annually to break even at a sales price of P1,000 per unit. Marta Mfg. Co. manufactures cellular phones. For the coming year, the company has budgeted the following costs for the production and sale of 3,000 cellular units. Percentage Budgeted of costs Budgeted costs considered costs per Unit variable Direct materials P630,000 P210 100% Direct labor 300,000 100 100% Factory overhead 720,000 240 20% Selling & administrative expenses 600,000 200 25% Totals P2,250,000 P750 REQUIRED: 1. Compute the sales price per unit that would result in a budgeting operating income of P900,000, assuming that the company produces and sells 3,000 units. (Hint: First compute the budgeted sales revenue needed to produce this operating income.) 2. Assuming that the company decides to sell the cellular units at a unit price of P1,250 per unit, compute the following: a. Total fixed costs budgeted for the year. b. Variable costs per unit. c. The unit contribution margin. d. The number of cellular units that must be produced and sold annually to break even at a sales price of P1,000 per unit.
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