Operating and Financial Leverage 189 188 Chapverd The break-even point for Product E is Use the following information to answer questions 26 through 28: 21. 800 units. PIS,ODD. d. 1,000 units. Given the following income statement for OR Company for 20X4: P72,000. Sales (30,090 units) If Marcus Company desires a monthly income equal to 10% of sales, Less Operating Expenses: P600.000 monthly sales will have to be (ignore taxes) Variable 1.500 units. 2.000 units. Fixed P390,000 760 units. 1,600 units. Net income 140.000 530,000 P 70,000 123 If the selling price were reduced by 5%, variable costs reduced by 26 P1.00. and fixed costs increased to a total of P38,400, how many units The break-even point for 20X4 is would need to be sold to carn an income of P21,000 (ignore taxes)? 26,600 units. h 17,500 units. C. P460,000. 1,000 units. 1,700 units. P400,000, 2,700 units. d. 2,950 units. 27. The Company's degree of operating leverage is a. 3. Use the following information to answer questions 24 and 25: 2. 4.28. 8.57. Redwood Furniture Company produces two kinds of chairs; an oak model and 28. a chestnut wood model. The oak model sells for P60 and the chestnut wood The Company's margin of safety (rounded to the nearest whole percent) is model sells for P100. The variable expenses are as follows: a. 33% 12%. Oak Chestnut b. 50%. d. 57%. Variable production costs per unit P30 P35 Variable selling expenses per unit P 6 The following information pertains to questions 29 through 31: Expected sales in units next year are: 5.000 oak chairs and 1,000 chestnut Kristin is a distributor of brass picture frames. For 20X4, she plans to purchase chairs. Fixed expenses are budgeted at P135.000 per year. for P30 each and sell them for P45 each. Kristin's fixed costs are expected to be P240,000. Kristin's only other costs will be variable costs of P60 per 24. The yearly break-even point in total sales for the sales mix expected is shipment for preparing the invoice and delivery documents, organizing the a. P270,000. C. P485,000 delivery, and following up for collecting accounts receivable. The P60 cost P300,000. d P500,000. will be incurred each time Kristin ships an order of picture frames, regardless of the number of frames in the order. 25. The company's overall contribution margin ratio for the sales mix expected is 29. Suppose Kristin sells 40,000 picture frames in 1,000 shipments in 40%. 50% 20X4, what is the Kristin's operating income for 20X47 h 45% d. 60%. a. P300,000 C. P240,000 P420,000 d. P450,000 30. Suppose Kristin sells 40,000 picture frames in 800 shipments in 20X4, what is the Kristin's operating income for 20X4? C. P211,000 a. P246,000 P325,000 d. P312.000