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PRACTICE PROBLEMS in CVP ANALYSIS Solve the following problems. Show your solution clearly specifying your final answer. Submit in pdf format. 1. Diamond Corporation's break-even-point
PRACTICE PROBLEMS in CVP ANALYSIS Solve the following problems. Show your solution clearly specifying your final answer. Submit in pdf format. 1. Diamond Corporation's break-even-point in sales is P1,012.500, and its variable expenses are 75% of sales. Determine the amount of sales if the company lost P36,000 last year. 2. Gemstone Corporation's sales are P1,500,000, its fixed expenses are P375.000, and its variable expenses are 60% of sales. What is the margin of safety? 3. Preciousgems Corporation has a margin of safety percentage of 20% based on its actual sales. The break-even point is P500,000 and the variable expenses are 60% of sales. Given this information, how much is the actual profit is? 4. Bounty Corporation expects the following operating results for next year: Sales P400,000 Margin of safety P100,000 Contribution margin ratio 75 Degree of operating leverage 4 What is Bounty's expecting total fixed expenses to be next year? 5. Abundance Corporation produces and sells a single product. Data concerning that product appear below: Selling price Variable expenses Contribution margin Per Unit P520 312 P208 Percent of Sales 100 60 40 The company is currently selling 6,000 units per month. Fixed expenses are P600,000 per month. The marketing manager believes that a P15,000 increase in the monthly advertising budget would result in a 100 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? Indicate the amount of change in the monthly net operating income and state whether it is an increase or a decrease
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