Problem 1

Cyan Company sells three products, X, Y and Z. the company sells three units of Z for each unit of A and two units of Y for each unit of Z. Total fixed costs amount to P 760,000. Product X's contribution margin per unit is P 20, Product Y's is 150% of X, and Product Z is twice as much as Y.

Required: Compute for

1.Average unit contribution margin

2.Break-even point in units including allocation to the three products.

Problem 2

Sweet Corporation sells two products, Chocolate and Mallows. The sales and contribution margin ratio of these two products are given below.

Chocolate Mallows

Sales P 700,000 P 300,000

Contribution margin ratio 60% 70%

The company's fixed costs and expenses total P 756,000. The company's average unit sales price is P 60.

Required:

1.Average contribution margin ratio

2.Composite break-even sales in pesos

3.Sales of products Chocolate and Mallows at break-even point

4.Net income for each of the two products, assuming combined sales is P 1,500,000