The Rivera Company manufactures an electronic instrument that measures pulse and blood pressures for joggers. The instrument has a sleeve that joggers wear, and the dials are attached to the joggers clothing. A contribution income statement for 2019 appears below:

Rivera Company

Income Statement

For the year ended Dec. 31 2019

Sales Revenue (25,000 units) 500,000

Variable cost 200,000

Contribution margin 300,000

Fixed Costs 120,000

Income before tax 180,000

Income tax (40%) 72,000

Net Income 108,000

Compute the following:

1.) Compute the breakeven point in units?

2.) Breakeven point in pesos?

3.) How much contribution margin is generated at the breakeven point?

4.) Compute the margin of safety in pesos

5.) Margin of safety ratio?

6.) Compute the number of sales unit to earn a before-tax profit of P240,000

7.) Compute the amount of pesos sales to earn a before-tax profit of P240,000.

8.) Compute the amount of sales required to earn an after-tax profit of P120,000

9.) How much would be the increase in before tax profit assuming sales are P800,000?

10.) Compute the degree of operating leverage.

11.) How much peso sales are required to earn a return on sales (before tax) of 20%

Problem #2

Maria Inc., sells a single product. The company's most recent income statement is given below.

Sales (4,000 units) P120,000

Variable expense 72,000

Contribution margin 48,000

Fixed cost 36,000

Operating Income 12,000

Compute the following:

1.) Compute the amount of Sales to breakeven?

2.) Compute how many units must be sold to breakeven?

3.) If 100 more units are sold, how much increase in profit is expected?

Problem #3

The Big Company provides you the following:

Fixed Cost per annum P400,000

Breakeven sales 1,000,000

Annual sales in units 32,000

Net Income P240,000

Compute the following:

1.) What is the firm's selling price per unit?

2.) Compute the firm's variable cost for the year?

3.) Compute the firm's Sales in pesos for the year.