MTB Company sells its product at P25.00 per unit. Monthly fixed costs, composed of manufacturing, selling and administrative costs amount to P350,000. Variable costs amount to P15.00 per unit, composed of P6.00 selling and administrative costs and P9.00 manufacturing. The company expects to sell 40,000 units of product in the coming month.

Required:

Consider the changes in the profit factors described in the independent cases below. Determine the net profit, profit percentage, break-even point and margin of safety figures if such changes were effected. Use the suggested format provided below for your solutions:

(A) (B) (C ) (D) (E ) (F) (G)

Sales

Variable Cost

Contribution Margin

Fixed Cost

Profit

Profit Percentage

Break-Even Point

Margin of Safety

Changes in the profit factors:

a. Selling price will increase by P5.00 per unit.

b. Volume will go down by 2,000 units.

c. Variable cost per unit will go up by 10%.

d. Fixed cost will increase to P360,000.

e. Selling price will decrease by 20%, resulting into an 80% increase in volume.

f. Fixed cost will go down by P50,000. This will cut production and sales volume by 50%.

g. Included in the P6.00 variable selling and administrative cost is salesmens commission of P2.00 per unit. In the coming month, these salesmen will be paid with fixed salary of P30,000 (total amount) instead of the commission of P2.00 per unit. This change in payment scheme is expected to decrease volume by 3,000 units.