Reference no: EM132970094
Problem 1 - Comprehensive Exercise - Baguio, Inc. produces only one product, berry baskets, which it sells for P72 each. Unit variable costs are P32 and total fixed expenses are P15,000. Actual sales for the month of June totaled 2,000 units.
Required -
1. How much is the current operating income of the company?
2. Compute the break-even point in peso and in units?
3. Compute the margin of safety in units and peso for the company for June.
4. Compute the degree of operating leverage for the month of June.
Problem 2 - Break-Even Point and Target Profit - One of Zamboanga Corp.'s only products has the following information: Selling Price P 15 Variable Cost per Unit 10 Total Fixed Cost P 25,000 The following questions are independent of each other:
1. What is the Break-Even Point in Units and in Peso Sales?
2. How many units must be sold if the company wants to earn a profit of P20,000.
Problem 3 - Margin of Safety and Degree of Operating Leverage - Manila Corporation has the following information:
Units sold 20,000
Sales P300,000
Variable costs 210 000
Contribution margin 90,000
Fixed costs 60,000
Net income P30,000
Required - Determine tlie following:
1. The break-even point in peso sales.
2. The margin of safety in peso sales and as a percentage.
3. Compute the degree of operating leverage.
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