Metal Industries, Inc. operates its production department only when orders are received for one or both of its two products, two sizes of metal discs. The manufacturing process begins with the cutting of doughnut-shaped rings from rectangular strips of sheet metal; these rings are then pressed into discs. The sheets of metal, each 4 feet long and weighing 32 ounces, are purchased P13.60 per running foot. The department has been operating at a loss for the past year as shown below.

Sales for the year P1,720,000

Less: expenses 1,772,000

Net loss for the department P 52,000

The following information is available.

1. Ten thousand 4-foot pieces of metal yielded 40,000 large discs, each weighing 4 ounces and selling for P29, and 40,000 small discs, each weighing 2.4 ounces and selling for P14.
2. The corporation has been producing at less than normal capacity and has had no spoilage in the cutting step of the process. The skeletons remaining after the rings have been cut are sold for scrap at P8.00 per pound.
3. The variable conversion cost of each large disc is 80% of the discs direct material cost, and variable conversion cost of each small disc is 75% of the discs direct material cost. Variable conversion costs are the sum of direct labor and variable overhead.
4. Fixed costs were P860,000.

1. The material net cost per ounce is

1. P2.00 b. P1.60 c. P1.70 d. P1.80

2. The total variable costs per unit for the large and small discs, respectively, are

1. P10.20 and P8.60. c. P9.10 and P5.30.
2. P14.40 and P8.40. d. P11.80 and P6.60.

3. If the material cost for large and small discs is P8.50 and P5.10, respectively, and the normal production capacity is 100,000 units, what is the breakeven point?

1. 91,611. c. 79,816.
2. 87,216. d. 82,412.