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THEORY 1
It is a method that is to determine how many units must
be sold , or how much sales revenue must be generated
to earn a particular target income?
ANSWER: P720,000
PROBLEM 1B
Singsing Inc manufactures and sells key rings embossed with
college names and slogans. Last year the key rings sold for P75
each, and the variable costs to manufacture them were P22.50
per unit. The company needed to sell 20,000 key rings to
breakeven. The net income last year was P50,400.
The company expects the following for the coming year: the selling
price of the key rings will be P90; manufacturing costs per unit will
increase by 1/3; fixed costs will increase by 10%; the income tax
rate will remain the same. For the company to breakeven the
coming year, the company should sell(units)?
ANSWER: 19,250
THEORY 2
It is the units sold or the revenue
earned above the break-even volume
ANSWER: P205,000
THEORY 4
If the variable cost per unit goes
down, the effect of Contribution
Margin and Breakeven Point WILL
BE?
ANSWER: P80,000
PROBLEM 4B
Danny Company has total fixed costs of P122,000 and
variable cost of 75% of sales. The company desires a net
income after taxes of P87,200. Income taxes are 20%.
Sales returns are averaging 25% of gross sales. How
much should be the gross sales?
ANSWER: P1,232,000
THEORY 5
It is the horizontal axis of CVP graph