Pacey Manufacturing Company produces two products for which the following data have been tabulated. Fixed manufacturing cost is applied at a The sales manager has had a P160,000 increase in the budget allotment for products are not substitutes for one another in the eyes of the company's 24. Suppose the sales manager chooses to devote the entire P160,000 to increased advertising for X. The minimum increase in sales units of X Technics chnolog, and L 134 Chapter 4 Questions 24 and 25 are based on the following information rate of P1.00 per machine hour. Y P3.00 P1.50 P0.20 P1.00 x P4.00 P2.00 P0.75 P1.00 Per Unit Selling price Variable manufacturing cost Fixed manufacturing cost Variable selling cost customers (CMA, Adapted) required to offset the increased advertising is a. 640,000 units. b. 160,000 units. c. 128,000 units. d. 80,000 units. 25. Suppose the sales manager chooses to devote the entire P160,000 to increased advertising for Y. The minimum increase in sales pesos of Y required to offset the increased advertising would be P 160,000. b. P 320,000. P 960,000 d. P1,600,000 a. c. (CMA, Adapted) Questions 26 through 28 are based on the following information. Jheng Company has the following revenue and cost budgets for the two products it sells: Sales price Direct materials Plastic Frames P10.00 (2.00) Glass Frames P15.00 (3.00) Cost-Volume-Profit Relationships 135 Direct labor (3.00) (5.00) Fixed overhead (3.00) (4.00) Net income per unit P 2.00 P3.00 Budgeted unit sales 100,000 300,000 The budgeted unit sales equal the current unit demand, and total fixed overhead for the year is budgeted at P975,000. Assume that the company plans to maintain the same proportional mix. In numerical calculations, Jheng rounds to the nearest centavos and unit. 26. The total number of units Jheng needs to produce and sell to break even is 150,000 units. b. 354.545 units. 177,273 units. d. 300,000 units. (CMA, Adapted) a. c. 27. a. The total number of units needed to break even if the budgeted direct labor costs are P2 for plastic frames instead of P3 is 154,028 units. b. 144,444 units. 156,000 units. d. 146,177 units. (CMA, Adapted) c. 28. The total number of units needed to break even if sales are budgeted at 150,000 units of plastic frames and 300,000 urrits of glass frames with all other costs remaining constant is 171,958 units. b. 418,455 units. 153,947 units. d. 365,168 units. (CMA, Adapted) a. c. Questions 29 and 30 are based on the following information. P1,500,000 year is presented below. P250,000 150,000 75,000 100.000 575.000 P 925,000 Extreme Corporation manufactures skateboards and is in the process of preparing next year's budget. The pro forma income statement for the currem The breakeven point (rounded to the nearest peso) for Extreme For the coming year, the management of Extreme Corporation and a P45,000 increase in fixed expenses. The breakeven point for next 136 Chapter Sales Cost of sales: Direct materials Direct labor Variable overhead Fixed overhead Gross profit Selling and G&A P200,000 Variable 250,000 Fixed Operating income 29. Corporation for the current year is P146,341. b. P636,364. P729,730. d. P181,818. 30. anticipates a 10% increase in sales, a 12% increase in variable 450.000 475.000 a. C. (CMA, Adapted) costs, year will be a. P729,027. b. P862,103. c. P214,018. d. P474,000. (CMA, Adapted)