Problem 9. MULTIPLE CHOICE Questions 1 through 5 are based on the Statement of Income of Alpha Company which represents the operating results for the current fiscal year ending December 31. Alpha had sales of 1,800 tons of product during the current year. The manufacturing capacity of Alpha's facilities is 3,000 tons of product. Consider each question's situation separately. Sales P900,000 Variable costs Manufacturing P315,000 Selling costs 180.000 Total variable costs P495.000 Contribution margin P405,000 Fixed costs is stu Manufacturing P 90,000 Selling 112,500 Administration Total fixed costs ed 45,000 P247.500 Net income before income taxes P157,500 Income taxes (40%) (63.000) Net income after income taxes P 94.500 1. The breakeven volume in tons of product for the year is a. 420 C. 495 b. 1,100 d. 550 2. If the sales volume is estimated to be 2,100 tons in the next year, and if the prices and costs stay at the same levels and amounts next year, the after-tax net income that DA can expect for next year is a. P135,000 C. P283,500 b. P110,250 d. P184,5003. Alpha has a potential foreign customer that has offered to buy 1,500 tons at P450 per ton. Assume that all of Alpha's costs would be at the same levels and rates as last year. What net income after taxes would Alpha make if it takes this order and rejectssome business from regular customers so as not to exceed capacity? a. P297,500 C. P211,500 b. P252,000 d. P256,500 4. Without prejudice to your answers to previous questions, and assume that Alpha plans to market its product in a new territory. Alpha estimates that an advertising and promotion program costing P61,500 annually would need to be undertaken for the next two or three years. In addition, a P25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Alpha's current after- tax income of P94,5007 a. 307.5 C. 273.33 b. 1,095 d. 1,545 5. Without prejudice to preceding questions, assume that Alpha estimates that the per ton selling price will decline 10% next year. Variable costs will increase P40 per ton and the fixed costs will not change. What sales volume in pesos will be required to earn an after-tax net income of P94,500 next year? a. P1,140,000 c. P1,500,000 b. P 825,000 d. P1,350,000