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PROBLEM 4

For the month of August, GEAR School Bags sold 3,500 bags cumulative sales of P 175,000. Its variable expense ratio is82.00% while its fixed monthly expense is P 7,875.

Please help me on these questions:

A. Margin of safety in peso sales =

B. Margin of safety in unit sales =

C. Target peso sales to achieve net operating income of P 20,475.00 =

D. Target unit sales to achieve net operating income of P 50,175.00 =

OUR SKYY sells two kinds of merchandise, ENGI and NEER with the following details per unit:

ENGI NEER

SELLING PRICE

P 150

P 200

VARIABLE COST

112.75

125

During September, the company sold 7,250 units - 20% of units were from ENGI. It incurred fixed expense accumulated at P 124,427.50.

Required:

By making a sales mix contribution format income statement, compute for the following:

A. Current net operating income of the sales mix =

B. Contribution margin ratio of the sales mix =

C. Break-even point in peso sales of the sales mix =

D. Break-even point in peso sales of product NEER =