Reference no: EM132548820
Peter and Senen Co. sell the same product in a competitive industry. Thus, the selling price of the product for each company is the same. Other data about the two companies are as follows: Peter Senen Fixed Costs P50,000 P70,000 Contribution margin ratio 40% 52%
Question 1. What are the companies' break event points? Data for questions No. 2 through 13 Ethel Corp. produces and sells a single product. The selling price is P25a and the variable cost is P15 per unit. The corporation's fixed costs is P100,000 per month. Average monthly sales are 11,000 units.
Question 2. What is the corporation's contribution margin per unit and as a percent of sales (CMR)?
Question 3. What is the corporation's break- even point?
Question 4. If the corporation desires to earn profit of P20, 000 before tax, it must generate sales of how much?
Question 5. If the corporation pays corporate income tax at the rate of 30%, and it desires to earn after-tax profit of P21, 000, it must generate sales of how much?
Question 6. How much sales in pesos must be generated to earn profit that is 8% of such sales?
Question 7. How many units must be sold to earn profit of P2 per unit?
Question 8. With average monthly sales of 11,000 units, what is the corporation's margin of safety?
Question 9. What is the Corporation Margin of safety ratio and the break-even sales ratio?
Question 10. At the present average monthly sales level of 11,000 units, the corporation's operating leverage factor is what?
Question 11. If fixed costs will increase by P20, 000, the Break-even point in units will increase (decrease) by how much?
Question 12. If variable costs per unit will go up by P5, the peso breakeven sales will increase (decrease) to?
Question 13. If selling price will increase to P30, the break -even point in units will increase (decrease) by how much?
Question 14. If sales increase from P800,000 to P900,000, and if the degree of operating leverage is 5, one could expect profit to increase by how many percent?
Question 15. A company has an operating leverage factor of 4. When its sales increased to P500,000, its profit before tax increased by 100%.Its variable cost ratio is 40%. How much is the company's fixed costs?
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