MAS 8003 COST-VOLUME-PROFIT ANALYSIS Page 17 of 23 Yakal Company shows the following budgeted data for the year 2017: Estimated sales 18,090 units Amount Per unit Direct labor P54,000 P3.00 Materials 8,100 0.45 Fixed overhead 13,500 0.75 Administrative expenses 16,200 0.90 P91,800 P5.10 Selling expenses are expected to be 20% of sales and profit before tax is to amount to P1.50/unit. 45. In order to attain the company's goal for 2017, the selling price per unit must be set at: a. P5.10 C. P8.25 b. P6.00 d. P9.75 46. The company's break-even point in units assuming that overhead and administrative expenses are fixed but that other expenses are fully variable, is equal to: a. 4,286 units C. 9,428 units b. 5,143 units d. 18,000 units ITEMS 47 and 48 ARE BASED ON THE FOLLOWING INFORMATION: Sta. Rosa Appliances Company presents its budgeted data for the year 2017. It is estimated that the company will sell 240 refrigerators for the year 2017. The estimated costs of these sales are as follows: Amount Per unit Direct labor P40,800 P 170 Materials 240,000 1,000 Fixed overhead 98,400 410 Administrative expenses _100,800 420 2480,000 P2.000 Selling expenses are expected to be 20% of sales. Profit before tax is to amount to P500 per unit. 47. In order to attain the company's goal for 2017, the selling price per unit must be set at; a. P2,000 C. P2,625 b. P2,500 d. P3,125 48. The company's break-even point in units assuming that overhead and administrative expenses are fixed but that other expenses are fully variable, is equal to: a. 74 units C. 188 units b. 150 units d. 240 units ITEMS 49 and 50 ARE BASED ON THE FOLLOWING INFORMATION: The production specialists of Won Corporation are considering the purchase of a new manufacturing equipment with a higher production capacity. Analysis shows that with the increased production, sales volume can be increased by as much as 50%. However, fixed manufacturing costs will increase by 60%. Variable manufacturing costs, on the other hand, is expected to drop from P2.00 to P1.80 per unit. There will be no change in the total fixed selling and administrative expenses and in the variable selling and administrative expenses per unit. The selling price per unit, likewise, will remain the same. Presented below are the results of the operations of Won Corporation for the year 2016: (Note: Won has since been operating at full capacity) Sales (200,000 units) P1,000,000 Manufacturing cost of goods sold:Fixed P200,000 Variable 400,000 (600,000) Selling and administrative expense Fixed P49,750 Variable 60,000 (109,750) P 290,250 49. Should Wilson decide to purchase the equipment, what would be the break-even point in terms of units? a. 86,120 C. 150,200 b. 127,500 d. 150,000 50. What is the maximum income (before taxes) that Won can earn after the purchase of equipment? a. P210,250 C. P500,250 b. P550,000 d. P502,500 51. The contribution margin ratio always increases when: a. break-even point decreases b. break-even point increases c. vanable cost as a percentage of net sales Increases d. variable cost as a percentage of net sales decreases 52. Merchants, Inc. sells Product X to retailers for P200. The unit variable cost is P40 with a selling commission of 10%. Fixed manufacturing cost totals P1,000,000 per month, while fixed selling and administrative cost equals P420,(00. The Income tax rate is 30%. The target sales if after tax income is P123,200 would be: a. 19,950 units 18,750 units b. 15,640 units d. 11,400 units 53. Sari-san Corporation is a multiple-product firm. In their review of operations, they decided to shift the sales mix from less profitable products to more profitable products, accounting for 35% of gross sales. This will cause the company's break-even point to: a. decrease C. increase b. change by 15% d. not change 54. All of the following statements are correct except a. Job cost records are used to accumulate product costs of individual units or small batches of identical units for both product costing and control purposes. b. Process costing, In contrast to job order costing, is applicable to a continuous process of production of the same of similar goods. C. The basic purpose of any costing system is to allocate the costs of production (direct materials, direct labor, and manufacturing overhead) to the units produced d. In comparison to job order costing systems, process costing systems are usually more complicated and more expensive. 55. Unico, Inc. formulates and sells three chemicals B1, B2, and B3. It sells to industrial users who use and buy these chemicals in the following ratio: three (3) measures of Bl for one (1) measure of B3, two (2) of B2 per one (1) measure of B1. The company makes the following contribution margin per measure: BI P30 B2 45 B3 90 Fixed cost amounted to P1.8 million At break even point, the volume of BI to be sold would be. a 12,090 C. 24,000 36,000 4,000